Tolley Tax Training

Questions for Chapter 3

QUESTIONS

3.1

Evelyn has the following income in 2010/11: 16,330 310 275 560

Salary from part time job (PAYE deducted 2,000) Interest received on NS&I investment account Interest received on her ISA Interest received on her Egg current account Calculate her tax due/repayable for the year.

3.2

Frank has the following income in 2010/11: 42,600 2,000 1,200

Salary (before PAYE deducted 6,630) Interest received on RBS deposit account Interest received on NS&I income bonds Calculate his tax due/repayable for the year. 3.3 Gretchen has the following income in 2010/11:

Rental income from house in Leeds Interest on government stocks Interest on loan to work colleague Calculate her tax due/repayable for the year.

5,000 25,000 100

3.4

Hayley has the following income in 2010/11: 140,000 20,000

Salary (before PAYE deducted 48,205) Interest received on Nationwide account Calculate her tax due/repayable for the year.

Reed Elsevier UK Ltd 2010

3.1

FA 2010

Tolley Tax Training

Questions for Chapter 3

Reed Elsevier UK Ltd 2010

3.2

FA 2010

Tolley Tax Training

Questions for Chapter 3

ANSWERS
3.1 Interest on an ISA is exempt from tax.

Non savings
Salary Interest (gross) Taxed income 100 560 x 80 Less: Personal Allowance Taxable income

16,330

Interest

310

(6,475) 9,855

700 ____ 1,010 1,971 202 2,173 (2,000) (140) 33

9,855 @ 20% 1,010 @ 20% Tax liability Less: PAYE Tax on interest (700 @ 20%) Tax payable

Tax

3.2

Non Savings
Salary RBS Interest 100 (2,000 x ) 80 NS&I income bonds Net income Less: Personal Allowance Taxable income 42,600

Interest

2,500 _____ 42,600 (6,475) 36,125 1,200 3,700 _____ 3,700

36,125 @ 20% 1,275 @ 20% 37,400 2,425 @ 40% Tax liability Less: PAYE deducted Tax deducted on interest (2,500 @ 20%) Tax due
Reed Elsevier UK Ltd 2010 3.3

Tax

7,225 255 970 8,450 (6,630) (500) 1,320

FA 2010

Tolley Tax Training

Questions for Chapter 3

3.3

Non Savings
Rental income Government stock interest Interest from colleague Net income Less: Personal Allowance Taxable Income

5,000

Interest

_____ 5,000 (5,000) NIL

25,000 100 25,100 (1,475) 23,625

2,440 @ 10% 21,185 @ 20% Tax liability = tax due

Tax

244 4,237 4,481

3.4

Non savings
Salary Nationwide interest 100 (20,000 x ) 80 Net income Less: Personal Allowance (reduced to nil) Taxable income

140,000

Interest

_____ 140,000 140,000

25,000 25,000 25,000

37,400 @ 20% 102,600 @ 40% 140,000 10,000 @ 40% 150,000 15,000 @ 50% Tax liability Less: PAYE Tax on interest (25,000 @ 20%) Tax due

Tax

7,480 41,040 4,000 7,500 60,020 (48,205) (5,000) 6,815

Reed Elsevier UK Ltd 2010

3.4

FA 2010