For the tax year 2019/20, Darcy has a trading profit of £158,000. During the year he made personal pension contributions of £30,000 and a net gift aid donation of £8,600.
Ahmed
Ahmed had a salary of £52,500 and saving income of £1,800. His employer has deducted £7,800 in PAYE from his earnings.
Ahmed also acquired a property on 1st June 2019 for the purpose of letting. The property was first let from 1 July 2019 unfurnished for an annual rental of £4,000 payable quarterly in advance from 1st July 2019. Ahmed incurred the following expenditure in respect of this property during the period to 5 April 2020.
£
20 June 2019 Repairs to roof following a storm on 15 June 2019 1,600
29 June 2019 Insurance for y/e 31/05/2020 420
1 February 2020 Repainting exterior 810
Required:
a. Calculate Darcy’s taxable income for the tax year 2019/20.(5 marks)
b. Explain how Darcy would get tax relief related to his pension contribution(3 marks)
c. Calculate the income tax payable by Ahmed and state the payment due date for the tax year 2019/20.
Question 2(12 marks)
(Total marks 20)
Marcus made some disposals of assets in the 2019/20 tax year. He has come to you for assistance with the tax implications of the disposals, and any resulting tax liability.
On 31 January 2020 he sold his house for £700,000. He had purchased it for £450,000 on 1 June 2002. In May 2009 he added an extension costing £70,000. He lived in the house from 1 June 2002 to 31 July 2010 when he moved into his partner’s house.
On 1 March 2020, he received proceeds of £40,000 on the maturity of some Treasury Stock. He originally invested £25,000 in November 2001.
