Nobody downloaded yet

The calculations for the capital gains tax - Case Study Example

Comments (0) Cite this document
We have made a review of the information provided by you on the status of your income and capital gains. For your review we have appended your income tax computation for the years 2007-08 and 2008-09. We write to advise you the following with respect to the applicability of the income tax and capital gains.
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER96% of users find it useful
The calculations for the capital gains tax
Read TextPreview

Extract of sample "The calculations for the capital gains tax"

Download file to see previous pages The calculations for the capital gains tax are shown in the appendix. From the calculations it may be observed that it is advisable to sell off the business building before 05th April 2008 as you can avail the indexation allowance and taper relief which are no more available. It may be noted that the indexation and taper relief are the allowanced granted by the government to provide for the increase in the asset value due to inflation (Chris Horne). In case you decide to sell of the property after 05th April 2008 you many have to pay higher CGT of 18,000. However in the case of the personal paintings since they have been acquired only in the year 2005 they do not stand eligible for any allowances and the capital gains will simply be the difference between the sale proceeds and the cost. Hence in this case it is advisable to sell the paintings after 05th April 2008 as the CGT on the chargeable gains can be paid at lower tax rate of 18 percent.
Income from employment is subjected to income tax as well as Class 1 National Insurance Contributions NIC). Payment of the Tax and NIC are normally undertaken by the employer through the PAYE system. However the employee who has other incomes subjected to tax and whose tax is not fully paid by the employer may complete a tax return and pay the NIC. Contributions to NIC are being made by both the employer and employee. The employee has to make contributions to NIC at 11percent or 9.4 percent between the primary threshold limit and the upper earnings limit. A charge of 1 percent is payable for earnings above the upper earnings limit. No NIC is payable by the employee or employer on the earnings up to the primary threshold limit. Depending on whether the employee is within the State Second Pension (S2P) or whether he has contracted out using a final salary (FS) or money purchase scheme (MP) the rates of NIC payable on earnings are determined.
Contracted in
Within S2P
Contracted Out
Other than S2P
Primary Threshold to Upper Earning Limit
Above Upper Earning Limit
As per the calculations shown in the appended income statement assuming that you have contracted out of the state pension scheme, you may have to contribute 9.4 percent of 23,760 i.e. 2233.44 towards the National Insurance Contribution.
Additional Tax Burden on Cigarettes and Wines
We understand that you and your wife are both heavy smokers and drinkers. Beware that the budget for the year 2008 has put additional tax burden on the cigarettes, wine, and beer to the extent of 0.14p on a bottle of wine, 0.4p on a pint of beer and 0.11p on a pack of cigarettes and to this extent the cost of these items would go up. We do hope you will revise your consumption of these items in view of increased burden on your income.
Other Tax Credits
The budget for the year 2008 has made the following changes in other Tax Credits for which you are entitled.
Tax Credits
Child Tax Credit - Family Element
Working Tax Credit - Basic
Married Couple Allowance
We have provided ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“The calculations for the capital gains tax Case Study”, n.d.)
The calculations for the capital gains tax Case Study. Retrieved from
(The Calculations for the Capital Gains Tax Case Study)
The Calculations for the Capital Gains Tax Case Study.
“The Calculations for the Capital Gains Tax Case Study”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF The calculations for the capital gains tax


...). This information can also be shown by balance sheet. Another importance of cash to those whose use it is that it is a report of funds that have been received by the business during a specific period of time from various business activities such as debentures, share issue and loans among others (Baker 2005). These information can also be shown by balance sheet. Statement of cash flow also plays an important role in enhancing and appraising business capital investment among other investments in order to determine profitability of programs supporting these capital investments (Baker 2005). Task three PART A Return on capital employed (abbreviated as ROCE) is calculated...
6 Pages(1500 words)Assignment

Capital Gains Tax Liability

...Capital Gains Tax Liability Case Study Word Count 544 Esteemed Client: I have been working in the Tax Services Division of DV Chartered Accountants for two years. It was brought to my attention that you needed some counsel on some rather important matters and I am here to now assist you. I took some notes regarding the meeting which I wish to share with you. First of all, you own 50% of your property. This is equity. With equity you can do many things, such as make purchases against your equity. The fact that you have a house on the beach in Marmion also helps you in the sense that you completely own (jointly, I might add) a residence. This is not only valuable...
6 Pages(1500 words)Case Study

The Impact Of Capital Gains Tax On Residential Property Investment Performance And Viability In Australia

...The Impact of Capital Gains Tax on Residential Property Investment Performance and Viability in AUSTRALIA Executive Summary Capital Gains Tax (CGT) in Australia applies to the capital gain made on disposal of any asset, except for specific exemptions. The most significant exemption is the family home. Rollover provisions apply to some disposals, one of the most significant is transfers to beneficiaries on death, so that the CGT is not a quasi death duty. CGT operates by having net gains treated as taxable income in the tax year an asset is sold or otherwise disposed of....
10 Pages(2500 words)Essay

Capital Gains Tax

...concessions do not apply to gains you make on depreciating assets that are included in your income under the uniform capital allowances system. 2. Goodwill The Capital Gains resulting from Goodwill is subject to the Capital Gains Tax. In the instant case there is a capital gain of $ 15,000 (Market Value $ 90,000 Minus Cost $ 75,000) which will be included in the taxable capital gains. 3. Land and Buildings The capital gains resulting from land and buildings is also to be included in the capital...
4 Pages(1000 words)Research Paper

Evaluation of Capital Gains Tax Proposals for 2008/09

..."Evaluation of Capital Gains Tax Proposals for 2008/09" The art of taxation consists in so plucking the goose as to obtain thelargest possible amount of feathers with the smallest possible amount of hissing. - Jean Baptiste Colbert Taxation can be described as the amount of money a firm or an individual pays to the government to ensure the proper functioning of the nation. The tax is levied on the income a person receives, profits an industry makes etc. Taxes are also imposed on services rendered, the the income acquired from the sale of an investment. The list oon taxable commodities and services depends upon the financial laws of a country. The...
4 Pages(1000 words)Essay

Time Value of Money Calculations

...of $16,692. This implies that the project would be beneficial to the organization The IRR is the discount rate that equates the present value of a project’s cash flows with the cost of the project (Brigham and Ehrhardt 2005). This occurs when NPV is equal to Zero (0). If used appropriately it is a valuable tool in the selection of projects (Hazen 2003). The IRR of the Server Update project is 10.13 per cent. This is 2.13 per cent above the organization’s cost of capital and therefore offers a positive return to shareholders. See Appendix 1 for the solution. According to Brigham and Ehrhardt (2005) the simple payback period indicates the time period over which the project recovers the initial investment. In performing...
3 Pages(750 words)Assignment

A accounting calculations

...ACCOUNTING CALCULATIONS Accounting Calculations inserts his/her ASB 2507 Assignment (A). A presentation of conventional/Traditional absorption costing (TAC) profit/loss statement Alpha Beta Gamma £ £. £. Selling volume 50000 40000 30000 Sale pricing per unit 45000 95000 73000 Variable cost 32000 84000 65000 Contributions/Unit 13000 11000 8000 Sales vol. X contribution per unit 650000 440000 240000 Machine dept 91636 __ 229091 183273 Assembly dept 254917 109000 72833 Profit/loss 303447 101659 (16106... ) ...
2 Pages(500 words)Essay

Turnover Calculations

...Employee Turnover and Retention Turnover Cost From the Model for Costing Lost Productivity (Jackson & Mathis, , it is evident that employee turnover in an organization is quite costly. From the example provided of an employee earning a salary of $20,000 and getting benefits of 40% of the salary, the turnover cost amounts to $3500. This is quite costly for human resource management considering that there are other resultant costs that include the hiring and training of new staff. This kind of information is important for human resource professionals in underscoring the importance of effective employee retention strategies. It also informs the HR professionals that turnover can be a good aspect at times when it applies to non... Turnover and...
1 Pages(250 words)Essay

Capital Gains and Losses

...Capital gains and losses Introduction For many years, the United s capital gains and losses have continued to be plagued by many tax issues. Mutual funds are characterized by many unfavorable tax rules. First, there are inefficiencies where capital losses are deducted, and capital gains realized on trades within mutual funds. Earnest & Young (2011) argues that the United States has one of the most complex tax systems in the world. In the United States, there is no value-added tax or stamp duty imposition. However, every person and organization is subject...
8 Pages(2000 words)Research Paper

Accounting Calculations

...Accounting Calculations Wireless and Remote connectivity Challenge – Sanford QUESTION 1. Compute the company’s predetermined overhead rate (a) -Pre -Determined overhead rate Fixed Manufacturing Overhead 106,250.00 Basis of Allocation -Machine Hrs 85,000.00 1.25 Variable Manufacturing Overhead 0.75 Predetermined Overhead Rate 2.00 Question 2: Calculation of Overhead Costs Manufacturing Overhead Utilities 14,000.00 Budgeted Overhead 160,000.00 Insurance 9,000.00 Maintainance 33,000.00 Indirect Materials 7,000.00 Indirect Labour 65,000.00 Depreciation 40,000.00 Under –Applied...
2 Pages(500 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Case Study on topic The calculations for the capital gains tax for FREE!

Contact Us