BPP PRACTICE ASSESSMENT 3 Business Tax Task 11

So the first thing to notice is that the AEA has already been deducted leaving them with a gain of £21,000.

Captial gains is charged at 2 rates, for lower 10% and for higher 20%. (Residential 18/28%)

Peter:
Other income of £11,300 this uses the basic band first.

BRB remaining: 37,500 - 11,300 = 26,200

All £21,000 falls into the BRB

Tax:
Lower = 21000 @ 10% = 2,100
Higher = 0

Richard:
Other income of £26,100.

BRB remaining: 37,500 - 26,100 = 11,400

Tax:
Lower = 11,400 @10% = 1,140
Higher = (21,000 - 11,400) @ 20% = 1,920

Gemma:
Other income of £66,800

BRB remaining = 0

Tax:
Lower = 0
Higher = 21,000 @ 20% = 4,200