Question

SRU Company is preparing its accounts for the year ended on 31st December, 2013. It has income from various sources and made some payments as shown below:

Items

Amount (£)

Rent revenue from a building located in Muscat

15,000

Dividends from a Germany company (non-associated companies)

19,500

Income from operations

350,000

Gain on the sale of a warehouse

10,000

Bank Deposit Interest

1,500

Dividends from a UK co. (non-associated companies)

4,500

Loan note interest from a UK co.

17,000

Gift Aid Donation

6,000

Dividends paid to shareholders (dividends payment is excluded from TTP)

7,000

Instruction:

Calculate the total taxable income for the company and tax liability.

Answer 1

Total taxable income:-

Income from house property:-

Rent received from a building located in muscat = 15000

Less: 30% deduction = 4500  

Gross annual value = 10500

Income from business and profession :-

Income from operations = 350000

Less:- Dividend paid=7000

=28000

Income from capital gain:-

Gain on sale of warehouse= 10000

Income from other sources:-

Bank depisit interest= 1500

Gift Aid donation= 6000

Loan interest from UKco. =17000

Total taxable income= 73000

Tax liability - As the income is less than 250000 hence the tax liability will be nil.