tax tables:

Rates and allowances

INCOME TAX (2018/19)

%

Basic rate 1 34,500 20%

Higher rate 34,500 150,000 40%

Additional higher rate 150,001 onwards 45%

A starting rate of 10% applies to savings income where it falls within the first 5,000 of taxable income.

Personal allowances (2018/19)

Personal allowance 11,850

Car fuel benefit (2018/19)

The base figure for calculating the car fuel benefit is 23,400.

Approved mileage rates (2018/19)

Car and vans: 0 10,000 miles 45p per mile

10,000+ miles 25p per mile

Motor cycles 24p per mile

Bicycles 20p per mile

CAPITAL GAINS TAX (CGT) (2018/19)

Standard rate of CGT 10%*

Higher rate of CGT 20%*

Entrepreneurs relief rate 10%

Annual exemption 11,700

Entrepreneurs relief 10,000,000

*An 8% surcharge applies in respect of residential properties.

NATIONAL INSURANCE (NI) (2018/19)

CLASS 1 (primary)

Earnings up to 162 a week Nil

Earnings between 162 and 892 12%

Earnings over 892 a week 2%

CLASS 1 (secondary)

Earnings up to 162 a week Nil

Earnings over 162 a week 13.8%

CLASS 2

Weekly Contribution 2.95

Small earnings exception - 6,205

CLASS 3

Weekly contribution - 14.65

CLASS 4

Lower profits limit 8,424

Upper profits limit 46,350

Rate on profits between upper and lower limit 9%

Rate on profits beyond upper limit - 2%

Trefor had taxable income for 2017/18 of 102,000 and he made the following disposals in i) n May 2017 he sold a house that he did not claim as his principal private residence (PPR) for 360,000. He had bought the house for 120,000 in June 2006 and had added an extension to the house in May 2010 at a cost of 55,000. ii) In June 2017 he sold part of a set of jewellery that was originally acquired in December 2008 for 9,000. He received proceeds of 21,000. The market value of the remaining jewellery was 39,000. ii) He sold, in October 2017, a painting for proceeds of 4,800. Auctioneer's commission was 400. He had bought the painting in October of the previous year for 4,250. iv) n November 2017 he sold an antique ornament for 7,000. He had bought the v) In December 2017 he sold a painting for 4,100. He had acquired it for 10,500 vi) n January 2018 he sold a car for 2,000. He had bought it in January 2013 for omament for 4,700 in June 2005. in June 2015. 18,000 and then spent 2,000 on improving it. Required: a) Calculate the capital gain or loss on each disposal and then calculate Trefor's liability to capital gains tax (CGT) for 2017/18. 15 marks b) Explain how entrepreneurs' relief operates in the context of CGT. 5 marks Trefor had taxable income for 2017/18 of 102,000 and he made the following disposals in i) n May 2017 he sold a house that he did not claim as his principal private residence (PPR) for 360,000. He had bought the house for 120,000 in June 2006 and had added an extension to the house in May 2010 at a cost of 55,000. ii) In June 2017 he sold part of a set of jewellery that was originally acquired in December 2008 for 9,000. He received proceeds of 21,000. The market value of the remaining jewellery was 39,000. ii) He sold, in October 2017, a painting for proceeds of 4,800. Auctioneer's commission was 400. He had bought the painting in October of the previous year for 4,250. iv) n November 2017 he sold an antique ornament for 7,000. He had bought the v) In December 2017 he sold a painting for 4,100. He had acquired it for 10,500 vi) n January 2018 he sold a car for 2,000. He had bought it in January 2013 for omament for 4,700 in June 2005. in June 2015. 18,000 and then spent 2,000 on improving it. Required: a) Calculate the capital gain or loss on each disposal and then calculate Trefor's liability to capital gains tax (CGT) for 2017/18. 15 marks b) Explain how entrepreneurs' relief operates in the context of CGT. 5 marks