Practice assessment 1 Task 11

Sentinel

Hi. I have worked out the Annual exempt not used for 20/21, but im struggling with the loss to carry forward.

As for 11B, i am confused how the answer for Donna is £290. I have managed to calculate Alex and Bridget correctly.

Please see attached for the questions -

Many thanks
Sentinel

skandwm15

11B I've been struggling with this one too.

Market Value £23,000 - Cost £7,500 = £15,500
£15,500 - Personal Allowance £12,300 = £3,200

Donna already earns £35,000. She is £2,500 from hitting the next tax band (£37,500).
Tax rates Basic Rate 10% // Higher Rate 20%

£3,200 is split:

£2,500 x 10% = £250
£700 x 20% = £140
= £390

skandwm15

11A

2019/20 Gain £7,250 - Loss £20,300 = £13,050 Loss
2020/21 Gain £25,610 - Loss 15,300 - A Ex £12,300 = Loss £1,990

The loss from 2019/20 £13,050 wasn't used in 2020/21 and is carried forward to the following year.

gg25

I am also stuck on the above question, more specifically the annual exemption not used in 2020/21.
Why are you not deducting the loss carried forward from 2019/20 first, before deducting the loss from the current year?

Sentinel

gg25 said:

I am also stuck on the above question, more specifically the annual exemption not used in 2020/21.
Why are you not deducting the loss carried forward from 2019/20 first, before deducting the loss from the current year?

For AEA not used, you have to do the following -

25,610 - 15300 = 10310
12,300 - 10310 = 1990