hrlecture4stuentslideshrlecture4studentslideshrlecture4studentslideshrlecture4studentslides.ppt

* * * * * * * * * * * * * * * * * ASB-3212 Taxation: 2014/15  Lecture 4 – Personal Income Tax Computations Lecturer: Helen Rogers Essential text “Taxation –policy and practice 2014/15” Lymer and Oats. Overview Taxation of individuals Allowances and reliefs available Sources of income Categories of income Basic tax computation Income Tax: Basics Calculated for fiscal years (FY) Currently tax year is Income Tax: Basics Aggregation of Income: Exempt income types: Some benefits – housing benefit, child benefit, maternity benefit, Tax free savings returns – e.g. interest from mini ISA Some payments from employment –redundancy payments (to max of ￡30,000) Others – scholarship grants, pension lump sums, lottery/premium bond winnings etc J. Bloggs Income tax computation for the tax year 2014/15 Total Other Savings Dividend Income Income Income ￡ ￡ ￡ ￡ Employment income x x Trading profits x x Property income x x Interest received (x 100/80) x x Dividends received (x100/90) x x ––––– ––––– ––––– ––––– Total income x x x x Less Reliefs Interest paid (x) (x) Loss reliefs (x) (x) ––––– -–––– ––––– ––––– Net income x x x x Less Personal Allowance (x) (x) ––––– ––––– ––––– ––––– Taxable income x x x x ––––– ––––– ––––– ––––– Personal allowance Personal allowance ￡10,000 Age allowances: Born before 6 April 1948 ￡10,500 Born before 6 April 1938 ￡10,660 Married couple’s allowance ￡3,140 Also: Blind person’s allowance ￡2,230 Personal allowance The personal allowance of ￡10,00 reduces b