he
- duea -
Investment Income
* &
23/24
Taxable Interest income:
-
# 6 4
.
: 23 - 5 4 24
. .
The following types of investment income is taxable and is considered on cash basis
-- Banks
~- Quoted Company Loan Notes ~
4
~- National Saving & Investment (NS&I) Accounts
-- Building Society Accounts (BSA = whereby a city government acquire loan for the development of city)
e
&
Exempt Interest Income:
-
The following types of investment income are exempt
~- Interest from National Savings Certificates (NSC)
-
(- National Saving & Investment (NS&I) Certificates
*
~
~- Winnings from Premium Bonds
-- Interest and dividends received from the investments contained in an Individual Savings Account (ISA)
-- - - - -
* ESA
Tamesi te
too
22t23 ASA
link
r
unused
&
zors
-
23/24
-
--
max limit - thoor
Individual Savings Accounts (ISA) ↑ 15000 Cash ISA
- ↑ IST0 > Stod fra
=
Maximum ISA investment limit is £20,000 per person per Fiscal Year · isno - Esto
&
- &
-
Two types are ISAs are: -
oo
E
·
-
- Cash ISA So
-
-
Shares ISA and/or stocks
·
OT com
is0
ro
*
There is no -
-
restriction on the-
proportion of the £20,000 limit that can be invested in the different types of ISA
----
-
Note that spouses and civil partners each have their own limits
is
--- - -
& IA
Disposal ,
and
any gain a
Exempt exte
1 is
If
Taxable Interest
-
Interest
>
-
-
-
Cash Femal
Accrued Income Scheme (AIS) Basis Basis
when cults
d
-
AIS is applicable if;
-
Purchased sod
- Gilts having nominal value exceed £5,000
- - -
&
-
- Gilts are the UK government securities, issued by the UK Government as a way of borrowing money
e - - - - - - -
~- Gilts are traded and any gain on disposal is exempt from capital gains tax
. . . - - -
-- Gilts Interest is normally paid at regular set intervals of 6 months
- -
- -
↑ ~ L
- At time of purchase or sale:-
- Interest income from gilts is calculated on Accrual Basis
-
- If gilts are held for set interval of six months (throughout):
N
- Then the interest income from gilts is calculated on cash basis for that time
-
T
>-
- 231
* - Fety
100000 + 3 %= 300 * 6/2 askell
Ieasta
Purchase
Example: t
Gu
o fine
7 5,
-
>3112 3
so
e e
*
,
&1:7 23
-
On 1 Jul 23, Peter purchased £100,000
I
Acerval
I O
a
⑨R - e
(nominal value) of gilts which pay interest at
- - - como
the rate of 3%. *3 Y
E
Interest is paid half-yearly on 30 Jun and 31
- - &
&
-
e
Dec based on the nominal value.
-
-
-
-
Peter sold the gilts on 28 Feb 24 to Petra for
- -
- x
£121,250.
#
-
Acerval
Bas
Required:
PAS
Accrued interest income 23-24
-
-
= 1920+ 50 = zo00
me
-
Cash interest income 23-24 = -
Total Interest Income 23-24
-
-
= 2000
-
-
sili
sild -
SONOU 23
Example:
I
Milt
>,
5
o Prohaged 61'Des 23
. 23
.
80
On 1 Jul 23, Peter purchased £100,000 1 f-23 - - -
.
Em
& - -
(nominal value) of gilts which pay interest at
the rate of 3%.
- - - -
I · I
O
-
Aerial
Interest is paid half-yearly on 30 Jun andO
31 Bases
O
& -
*
-
Dec based on the nominal value.
1100000
- - -
* 34
Peter sold the gilts on 30 Nov 23 to Petra for
- -
-
-
,
in
-
£121,250.
-
as
Required:
Accrued interest income 23-24 = /28
Cash interest income 23-24 = -
&
Is
Total Interest Income 23-24 = -
ubtl
300000 A LY =5000
Ab -
31 Jan M
.
O
-
T I pe
Example: v
sin e
I
1523
78000 K 31 Man 24
Purchard X .
On 1 May 23, Ying purchased £300,000
A e Perce I
- -
-
(nominal value) of gilts paying interest at the
E -
best
-
rate of 1%.
&
Interest is paid half-yearly onO
31 Mar and 30
e 300
4/
,
O
O ·
- -
C -
Sep based on the nominal value.
- - -
Ying sold the gilts on-
--
>
31 Jan 24 for £181,000
(including accrued interest), -
having received
-
- -
interest of £1,500 on 30 Sep 23.
-
- -
Required:
-
PPS -
125t 1020
Accrued interest income 23-24
&
-
-
= +
Cash interest income 23-24
-
= -
&
Total Interest Income 23-24 = 2250
-
-
Dividend Income
-
- Income received from investments in shares
-
- -
a- Dividend income is taxed on “Receipt Basis”
- &
-
paglar
&
E n
-
-
Question: Said has made a number of investments during the tax year.
e - & &
Tick the appropriate box to show which of the following investments will generate taxable income and which will
&
& & -
generate exempt income.
- - -
- - -
Taxable Exempt
£400 in shares in the company he works for
- -
~
£1,000 in an Individual Savings Account
-
-
I
£800 in a NS&I investment -
account
e
~
-
£500 purchasing a NS&I-
certificate
-
m
23/24
-
O ↑
-
27/23 23/sl
&
ezles
M Sold
(
>31 122 30-b 23
lan sitee
Kay
.
10922 109223
.
Pitts bes
k--I
Sm
Question: I O
Fearrel H It
- > 5000 Larry
Corro
On 1 Sep 22, Manon purchased £200,000 A 14 .
*
P z
- -
(nominal value) gilts, paying interest at 1%, for A 412 2 Zero *
61, 2
=
=
200 zoono
·
-
T
=
-
- e
£211,000. Interest is payable half yearly on②
-
30 * ,
- - - - -
* A51 y
O -
200
June and 31 December. f =
&
-
-
-
> 23/24
-
22/23 cast
Biess
⑭
He sold the gilts on②
-
- -
1 Dec 23 for £213,000 ~
(including accrued interest).
cast 1000
E a -
·
-
How much will Manon include in savings -Acerval -
- - - - -
income in respect of the gilts in the tax year
-
1833
- -
23-24? =
-
A. £833
B. £2,000
C. £1,000
O
D. £1,833
respe
an
Mar -1 2
&All
Question: 16023 Sub
>
-
e soleps >
se 31 Man in
.
I
-
cits
7 ser
I I
*
On 1 Jun 23, Ahmed purchased £10,000
-
-
-
(nominal value) gilts, paying interest at 2%, for
Arach
I Accrual
so
e
co
-
£11,000. Interest is payable half yearly on 31 *
O
E -
-
Mar and 30 Sep.
-
4//L
w As
/12
~
- -
②
He sold the gilts on 28 Feb 24 for £11,400
- - O
-3
(including accrued interest)
sash 2 -
How much will Ahmed include in-
savings
Accredi 67 Ob #
income in respect of the gilts in the tax year
-
+ =
②
23-24? esto
-
>
wO
A. £150
B. £165
C. £100
D. £183
Question:
Identify, by ticking the appropriate box, the treatment of each of the following forms of savings income.
- - - - --
Taxable Exempt
NS&I investment account interest
-
Gilt edged security interest
- - e
-
NS&I savings certificates interest
-
~
