• All the calculations should be shown in a detailed way and also write explanations of the steps and the solution.

• All workings should be shown and made to the nearest month and pound unless the question requires otherwise, and a copy of Tax Summary Data FA 2019 is given.

a copy of Tax Summary Data FA 2019

Question 2: This question has three separate part, and each part should be answered Part a - Tina Tina sold a painting on 1 July 2019 for 500,000. She purchased the painting in February 1997 for 350,000 She also disposed of a commercial investment property for 310,000 on 1 December 2019 and incurred agency fees of 15,000 on the disposal. She had purchased the property in August 1998 for 200,000 In addition, she sold an antique vaso for 10,000 in January 2020 which had cost her 15.000 in September 2017 Tina had capital losses broughtforward from previous tax years of 15,000. Tina's taxable income for 2019/20 is 50,000. Calculato Tina's Capital Gains Tax for 2019/20 (8 marks) Part b Jane Jane owns shares in ABC Ltd. She acquired 1,500 shares in the company on 31 May 2016 for 20,000, and 500 shares on 30 June 2017 for 10,000. On 7 July 2020 Jane bought a further 200 shares in ABC Ltd for 4,000. Jane sold 1,000 shares in ABC Lid on 28 June 2020 for 25.000. She is not an employee of ABC Ltd. Calculate Jane's capital gain on the disposal of the shares on 28 June 2020. (5 marks) Part c-Jerome Jerome bought a factory in June 2004 for 680,000. In August 2020 wishing to move to a more convenient location, he sold the factory for 800.000. He moved into a rented factory until January 2021 when he purchased and moved to a new factory. Assuming that all beneficial claims are made calculate the base cost of the new factory I it was purchased for (a) 750,000 (b) 600,000 (7 marks) Total (20 marks Summary of Tax Data Income Tax 2019-20 2018-19 TAX RATES AND BANDS Basic rate 20% 20% Higher rate 40% 40% Additional rate 45% 45% Basic rate limit 37,500 34 500 Higher rate limit 150,000 150,000 Different tax rates and hands apply to the non-savings income of Scottish taxpayers (see below) Starting rate for savings 0% OS Starting rate limit for savings 5,000 5.000 Personal savings allowance (basic rate taxpayer) 1,000 1.000 Personal savings allowance (higher rate taxpayer) 500 500 Dividend ordinary rate 7.5% 7.5% Dividend upper rate 32.5% 32.5% Dividend additional rate 38.1% 38.1% Dividend allowance 2,000 2,000 SCOTTISH TAX RATES AND BANDS Starter rate 19% 194 Basic rate 20% 20% Intermediate rate 21% 21% Higher rate 41% 41% Top rate 46% 46% Starter rate limit 2,049 2.000 Basic rate limit 12.444 12.150 Intermediate rate limit 30.930 31 580 Higher rate limit 150,000 150.000 * These tax rates and bands apply only to the non-savings income of Scottish taxpayers xd Summary of Tax Data 2019-20 12.500 1.250 2,450 2018-19 11,850 1.190 2.390 8.915 3.450 100.000 29,600 8.695 3,360 100,000 28.900 PERSONAL ALLOWANCES Personal allowance Marriage allowance Blind person's allowance Married couple's allowance: Born before 6 April 1935 Minimum amount Income limit for basic personal allowance Income limit for married couple's allowance CAR AND FUEL BENEFIT Not exceeding 50g/km 51g/km to 75g/km 76g/km to 94g/km 95g/km Each additional Sg/km Maximum charge Amount used in car fuel benefit calculation PENSION SCHEMES Annual allowance Lifetime allowance 16% 19% 229 23% 139 165 19% 20% +19 37% 23,400 +1% 37% 24,100 40.000 1,055,000 40.000 1.030,000 Capital Allowances Writing Down Allowance (WDA) Main pool of plant and machinery 18% 18% Special rate pool of plant and machinery 6% 8% Annual Investment Allowance (AIA) AIA annual limit from January 2016 200,000 200,000 AIA rate 100% 100% First Year Allowance (FYA) Low emission cars 100% 100% Zero-emission goods vehicles 100% 100% Gas refuelling equipment 100% 100% Charging points for electric vehicles 100% 100% Energy saving or water efficient technology 100% AIA annual limit temporarily raised to Elm berween 1 January 2019 and 31 December 2020 100% Summary of Tax Data 2019-20 2018-19 118 166 962 166 962 116 162 892 162 892 124 29 12% 2% 13.8% 13.8% National Insurance Contributions CLASS 1 Lower camings limit (weekly) Primary threshold (weekly) Upper earnings limit (weekly) Secondary threshold (weekly) Upper secondary threshold (weekly) Employee contributions Rate on earnings between primary threshold and UEL Rate on earnings beyond UEL Employer contributions Rate on earnings beyond secondary threshold CLASSIA Rate CLASS 2 Weekly contribution Small profits threshold CLASS 3 Weekly contribution CLASS 4 Lower profits limit Upper profits limit Rate on profits between lower and upper limit Rate on profits beyond upper limit 13.8% 13.8% 3.00 6.365 2.95 6.205 15.00 14.65 8,632 50,000 99 8,424 46,350 99 2% Capital Gains Tax 2019-20 2018-19 Standard ratet 10% 10% Higher ratet 20% 20% Entrepreneurs' relief rate 10% 10% Entrepreneurs' relief lifetime limit 10.000.000 10.000.000 Annual exempt amount 12.000 11.700 Taxalle gains on the disposal of residential property are taxed at 18% and 28% xil Summary of Tax Data Corporation Tax Financial Year FY2019 Main rate 199 Patent box (effective rate) 10% R&D SMEs payable credit 14.5% R&D expenditure creditt 12% t R&D expenditure credit 12% as from January 2018 Note: The main rate for FY2020 will be 17%. FY2018 19% 10% 14.5% 12% FY2017 194 10% 14.5% FY2016 20% 104 14.5% hand Lower rate Inheritance Tax Date of transfer Nil rate Rate on life time transfers 6 April 2006 to 5 April 2007 0 - 285,000 20% 6 April 2007 to 5 April 2008 0-300,000 20% 6 April 2008 to 5 April 2009 0 - 312.000 20% 6 April 2009 to 5 April 2012 0-325,000 20% 6 April 2012 to 5 April 2020 0 - 325,000 Note: The residence nil rate band for 2019-20 is 150,000. Rate on death 40% 40% 40% 40% 40% 20% 36% Value Added Tax Standard rate Reduced rate Registration thresholdt Deregistration thresholdt * Thresholds frozen until April 2022 20% (from 4 January 2011) 5% 85,000 (from 1 April 2017) 83,000 (from 1 April 2017)