Question Description

b) Stella Akorfa retired from Stonebridge (UK) Limited has served the company for 20 years meritoriously. She relocated to Abuakwa in Kumasi, Ghana where she commenced business as a Security Consultant to honorable politicians. She rented out her house in the UK for a yearly rent of 10,000. She also maintained a healthy balance in her account with Gold Bank in London.

Her income for 2018 accounting year is as summarised below:

Consultancy Income (net of all taxes) GH70,000.

Dividend received from Success Company (Ghana) Ltd, a resident company at gross amount GH10,000.

Rent paid into her London bank account 9,000. Withholding tax amounting to 1,000 had been deducted.

Her London bank credited her account with a net of 4,500 bank interest. UK tax rate on interest is 10%.

Additional information:

The exchange rate is GH6 for 1.

Stella Akorfa does not contribute to social security in Ghana.

Required:

Compute her tax liability as an individual for the relevant year of assessment while granting her relief for double taxation under the Ghana/UK Double Taxation Agreement using the credit method. Use 2018 graduated tax rates.