June 2023 to March 2024 exams Watch free ACCA TX lectures
Example 11 David and Victoria are married and in 2022/23 David had a trading income assessment of £10,000
and Victoria received a salary of £30,500.
Calculate the income tax liabilities of David and Victoria assuming that an election is made to transfer the transferrable amount of David’s personal allowance to Victoria and state the date by which the election should be made. 5. Deductions from Total Income 5.1. Reliefs are tax deductible The only reliefs examinable in the TX-UK exam are:
(a)
qualifying interest, and
(b)
certain trading loss reliefs - These reliefs are deducted from total income in deriving net income
and as with the deduction of the PA from net income they are deducted firstly from non savings
income before savings income and then dividend income.
5.2. Qualifying interest is: (a)
On a loan to purchase an interest in a partnership or a contribution to the partnership of capital
or a loan
(b)
On a loan to purchase plant or machinery used in the business, by a partner
(c)
On a loan to purchase plant and machinery by an employee if used in the performance of
duties
(d)
On a loan to purchase an interest in a close company
5.3. Loss reliefs These will be fully explained in chapter on losses.
Example 12 Kathy has trading profit of £52,000 in 2022/23 and paid £1,000 interest on a loan to purchase plant &
machinery used in the business of her partnership.
Calculate Kathy’s income tax liability for 2022/23
