Income from property

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Income from property"

Transcription

1 2 Icome from property this chapter covers... I this chapter we will examie how icome from reted UK property is taxed. We will start by examiig what exactly is covered by the rules that we eed to lear, ad the see how the accruals basis is applied to this type of icome. We will look i detail at the expediture that is allowable that which ca reduce the taxable amout. We will cotrast this with disallowable expediture, ad see how a calculatio of taxable profit is carried out for both idividual ad multiple properties. Next we will examie how relief ca be claimed uder the ret a room scheme whe part of the home that a taxpayer occupies is reted out o a furished basis (for example to a lodger). We will see that this relief ca also apply to operatios that also supply services, like guest houses. Holiday lets are examied i the followig sectio. This is followed by a summary of how retal losses ca be offset. Fially we will illustrate completio of the tax retur supplemetary pages for UK property, ad summarise the records that should be kept by a ladlord or his aget.

2 i c o m e f r o m p r o p e r t y 2. 1 H O W P R O P E R T Y I N C O M E I S TA X E D w h a t d o e s P r o p e r t y I c o m e c o v e r? Property icome ca iclude: icome from retig out lad icome from retig out ufurished property icome from retig out furished property The term property is used to mea buildigs, either residetial (flats, houses, etc) or commercial (offices etc). Furished holiday lettig icome is also taxed as property icome. The geeral rules that we will study i this chapter apply to holiday lettigs as well as other property retals. You may be asked to calculate the amout assessable relatig to oe or more properties that are reted out by a cliet. The cliet is usually the ower of the properties, but it would be possible for him to have reted them from aother ladlord. The ladlord may have bought the property specifically to ret out. This is kow as buy to let. There are special rules that ca apply whe someoe is retig out part of the house that they live i. We will examie this ret a room scheme later i the chapter. a c c r u a l s b a s i s o f c a l c u l a t i o You may remember from the last chapter that a basis of assessmet sets out the way that icome is calculated ad liked to tax years. The basis of assessmet for property icome is profits from lad ad property for the tax year, calculated o a accruals basis. This meas the icome should therefore relate to the tax year i which it will be assessed. For example, for the tax year 2014/15 this would be the period 6/4/14 to 5/4/15. You eed to be clear about the distictio betwee: the accruals basis that we use here. (This is the same basis that applies to statemets of profit or loss (icome statemets) uder ormal fiacial accoutig rules), ad the receipts (or cash) basis that does ot apply to this category, but applies (for example) to salaries ad wages Because property icome is calculated o a accruals basis, the assessable retal icome is that which relates to the tax year. So, for example, (assumig a ogoig teacy):

3 2. 2 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l if a teat had paid more tha oe year s worth of ret durig the tax year, oly the amout that related to the tax year would be assessable i the tax year if a teat had falle behid with his retal paymets, the amout that related to the tax year would still be assessable i that year, eve though it had t all bee received. This is provided the teat was able to pay it evetually Oe issue to be careful about is where a upaid amout of ret is cosidered irrecoverable. I these circumstaces the irrecoverable amout ca be deducted from the retal icome. This is exactly the same logic that occurs i fiacial accoutig, whe irrecoverable debts are writte off. Case Study M I N N I E S T R E E T: A S S E S S A B L E R E N T Miie Street rets out two ufurished properties to teats. Each has a mothly retal of 500, payable i advace o the 6th day of each moth. From Jauary 2014 owards, the followig rets were paid: The teat of property oe paid the ret o time every moth durig O 6 Jauary 2015 he paid six moths ret i advace sice he was goig o a log holiday. The teat of property two also paid the ret o time every moth durig Durig 2015 he failed to pay ay ret. He left the property o 5 March, without leavig a forwardig address or payig the ret that he owed. Miie has bee uable to locate him sice the. Property two was re-let to aother teat i May r e q u i r e d Calculate the assessable amout uder property icome for Miie Street for the tax year 2014/15. s o l u t i o The assessable amout for property oe is 12 x 500 = 6,000. The extra ret paid i advace by the teat that relates to the period after 6/4/2015 will be assessable i the followig tax year.

4 i c o m e f r o m p r o p e r t y 2. 3 The assessable amout for property two is calculated as: Relatig to the period of occupatio 6/4/2014-5/3/ x 500 = 5,500 Less irrecoverable amouts (relatig to ret due i Jauary ad February but ot paid) 2 x 500 = 1,000 4,500 Sice property two is ot reted out i the period 6/3/2015 to 5/4/2015 there is o assessable amout for this moth. The total amout assessable as property icome for Miie Street for 2014/15 is therefore 6, ,500 = 10,500. E X P E N D I T U R E T H AT I S A L L O WA B L E Allowable expediture is expediture that ca be deducted from the retal icome to arrive at the assessable property icome. Note that some expediture that is quite proper from a accoutig poit of view may ot be allowable for taxatio purposes. This does ot mea that the accouts produced are ecessarily wrog, but we will eed to make adjustmets before they are suitable for our tax work. The geeral rule for expediture to be allowable i a property icome calculatio is that it must be: reveue rather tha capital i ature, ad wholly ad exclusively for the purpose of lettigs Allowable expediture may iclude: busiess rates, water rates ad coucil tax this would apply where the ladlord has paid these items, effectively o behalf of the teat the ret would have bee set at such a level to allow for the fact that the ladlord was payig this cost ret paid to a superior ladlord this would apply oly if the property did ot belog to the cliet, but was reted from someoe else, the situatio would therefore be oe of sublettig iterest paid o a loa or mortgage to buy the property this applies where the cliet is the ower; where paymets are made to the leder that iclude both iterest ad repaymet of the amout borrowed, oly the iterest part is allowable

5 2. 4 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l isurace ad maagemet expeses costs of advertisig for teats ogoig repairs, maiteace ad redecoratio costs (but ot those of a capital ature see ext page) irrecoverable ret (as discussed above) wear ad tear allowace, if the property is reted out o a furished basis Expediture that satisfies the above rules ad is icurred before the premises are reted out or i periods i betwee retal periods ( void periods) is also geerally allowable. However such expediture is ot allowed durig periods whe the property is used privately - for example whe a family member is livig there without payig ret. w e a r a d t e a r a l l o w a c e For furished residetial lettigs oly, wear ad tear allowace is a reflectio of the costs ivolved i providig ad maitaiig suitable furiture ad other items i the property. It is calculated as: 10% of the ret received (after deductig oly rates (geeral ad water) ad coucil tax (where applicable) from the ret) Wear ad tear allowace is a broad measure that is easy to calculate ad simply provides some recogitio that costs are icurred i the provisio of furiture. The logic for deductig rates or coucil tax before applyig the 10% i the calculatio is that the ret would have bee artificially icreased to cover them i the first place, sice they are ormally the teat s resposibility. It would therefore be ufair to allow more wear ad tear allowace just because the ladlord was effectively collectig ad payig out these amouts. Note that the calculatio does ot take accout of how much the ladlord speds o furiture, or how he depreciates it i his accouts. Where there is irrecoverable ret, this is deducted from the ret receivable before the 10% is applied. Wear ad tear allowace is ormally claimed through the UK Property pages of the self assessmet tax retur, as we will see later i this chapter. However, the time limit for makig the iitial claim is oe year after the 31 Jauary followig the ed of the tax year i.e. oe year after the olie retur is due. Wear ad tear allowace caot be claimed for holiday lets (see later i this chapter).

6 i c o m e f r o m p r o p e r t y 2. 5 E X P E N D I T U R E T H AT I S N O T A L L O WA B L E Sice oly reveue expediture is allowable, it follows that ay capital expediture will ot be allowable. No-allowable capital expediture icludes the followig: the cost of the property itself together with ay furiture etc (uless reewals allowace is claimed). Also cosidered as capital will be the costs coected with the purchase, icludig the legal ad professioal fees ad Stamp Duty Lad Tax icurred i buyig the property the cost of improvemets. This will apply whe expediture is icurred i upgradig or extedig the property. For example, buildig a garage is a improvemet, as is the istallatio of cetral heatig where oe existed previously. Note that ormal ogoig repairs ad maiteace whe the property is simply brought back to its previous coditio are allowable the cost of reovatios carried out before a property is reted out for the first time. Oe argumet for viewig this expediture as capital is that the eed for the reovatios will have bee reflected i the lower purchase price of the property Other costs that are ot allowable iclude the followig: depreciatio of ay kid relatig to capital expediture expediture ot coected with the busiess of lettigs (for example, expediture o a private part of the property) C A L C U L AT I N G T H E P R O F I T O R L O S S U N D E R P R O P E R T Y I N C O M E To arrive at the profit or loss uder property icome we eed to: determie the assessable rets receivable, ad deduct ay allowable expediture The calculatio of the profit or loss is kow as a property icome computatio. d e a l i g w i t h a s i g l e p r o p e r t y We will ow preset a Case Study ivolvig a sigle property to show how this calculatio ca be carried out. We will use the iformatio regardig allowable expediture to help us (see pages 2.3 ad 2.4).

7 2. 6 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l Case Study U N A L O D G E : C A L C U L AT I N G A S S E S S A B L E P R O P E R T Y I N C O M E Ua Lodge rets out oe furished property. The followig is a statemet compiled from her accoutig records relatig to the period 6/4/2014-5/4/2015. Retal Icome Receivable 12,000 less expediture: Coucil Tax 800 Water Rates 400 Irrecoverable Ret 600 Isurace 300 Istallig Cetral Heatig 2,000 Depreciatio of Furiture 900 Maagig Aget s Charges 600 5,600 Profit 6,400 r e q u i r e d Calculate the assessable property icome for Ua Lodge. s o l u t i o We ca re-draft the profit statemet, icorporatig oly allowable expediture ad deductios as follows: Property Icome Computatio Retal Icome 12,000 less allowable expediture: Coucil Tax 800 Water Rates 400 Irrecoverable Ret 600 Isurace 300 Maagig Aget s Charges 600 Wear & Tear Allowace 1,020 3,720 Assessable 8,280 Notes The istallatio of cetral heatig is capital expediture, ad therefore ot allowable for tax purposes. Depreciatio is ever allowable. The wear ad tear allowace is calculated as: 10% x ( 12, irrecoverable ret coucil tax water rates) = 1,020.

8 i c o m e f r o m p r o p e r t y 2. 7 s e v e r a l p r o p e r t i e s Whe there is more tha oe property, the best approach is to draw up a statemet with oe colum for each property. The additio of a total colum provides a meas of double-checkig your arithmetic, ad sets out the figures eeded for the tax retur. Each property ca the be dealt with i tur, ad the overall result icorporated ito oe property icome assessmet figure. If oe property the icurs a loss after adjustmet for tax purposes, it should be offset agaist the assessable profits from the other properties. Usig a columar format like this eables the et result to be calculated quite easily, as i the Case Study which follows. I a later sectio (page 2.13) we will go o to see how to deal with a situatio where the et effect of all the properties is a loss. Case Study A N D Y L O R D : P R O F I T S F R O M S E V E R A L P R O P E R T I E S Ady Lord rets out three properties i High Street. Property umber 1 is ufurished, while properties 2 ad 3 are furished. Ady has provided the followig statemet of icome ad expediture o the properties for the period 6/4/2014-5/4/2015. Property 1 Property 2 Property 3 Retal Icome 5,000 3,500 4,300 Less expeses: Coucil Tax Loa Iterest 3,600 2,040 - Ret Payable - - 2,500 Property Isurace Bad Debt Roof Repairs Other Repairs 2, Professioal Fees for Debt Recovery Depreciatio ,150 3,190 3,800 Profit / (Loss) (4,150)

9 2. 8 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l You have also determied the followig facts: property umber two was occupied ret-free by Ady s studet so util 5 September, whe it was let out commercially to a teat. The repairs were completed i December. The other expeses relate to the whole tax year the loa iterest relates to mortgages obtaied to purchase properties umber oe ad two the ret payable relates to property umber three that is ot owed by Ady Lord the bad debt ad the professioal fees for attempted debt recovery relate to a problem with a teat for property umber oe who left whilst owig ret. He caot be traced Roof Repairs relates to the cost of repairig damage that occurred durig a storm. This amout was ot covered by the isurace policy Other Repairs icludes 2,900 paid to build a porch o property umber oe r e q u i r e d Calculate the amout of assessable property icome. s o l u t i o Property 1 Property 2 Property 3 Total Retal Icome 5,000 3,500 4,300 12,800 Less allowable expeses: Coucil Tax Loa Iterest 3,600 1,190-4,790 Ret Payable - - 2,500 2,500 Property Isurace Bad Debt Roof Repairs Other Repairs Professioal Fees for Debt Recovery Wear & Tear Allowace Assessable amout (750) 1, ,253

10 i c o m e f r o m p r o p e r t y 2. 9 Notes Property umber two is oly reted out commercially for seve moths of the tax year. Therefore oly 7/12 of the loa iterest ad 7/12 of the property isurace expeses are allowable. The bad debt for property No. 1 is cosidered as irrecoverable ret ad is therefore allowable. The professioal fees for attemptig to recover the debt are wholly ad exclusively for the retal busiess ad therefore allowable. The roof repairs are allowable as reveue expediture. The other repairs are allowable, with the exceptio of the porch that is cosidered a improvemet ad therefore capital i ature. Depreciatio is ot allowable. The wear ad tear allowace is calculated as 10% of the ret less coucil tax. There is o wear ad tear allowace for property No.1, sice it is let ufurished. The loss for property No. 1 is offset agaist the profits o the other properties to give a property icome figure of 1,253. R E N T A R O O M R E L I E F So far we have examied the situatio where a taxpayer rets out a property that they are ot curretly livig i. Where a part of a idividual s ow home is let out o a furished basis, the a special relief, called ret a room relief ca be claimed. This ca apply whether the idividual ows or rets their home. The relief meas that gross icome (ie before expeses) of up to 4,250 would be tax free for a idividual. If the lettig is carried out by a married couple or civil partership i their home, the the relief is split so that each perso s relief is 2,125. The relief ca apply to (for example) retig out a spare room to a lodger, or offerig bed ad breakfast example If a married couple ret out their spare room to a lodger for 80 per week for the whole year, their combied gross icome from this would be 80 x 52 weeks = 4,160. Each idividual s share of the gross icome would be 2,080, ad therefore each could claim that their icome from this source was tax free.

11 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l If goods or services (for example food ad / or laudry services) are provided i additio to the amout received just for the room, the the gross icome relates to the combied amout receivable. This could apply to lodgers, or to a guest house or bed ad breakfast operatio. example A idividual offers bed ad breakfast for 40 per ight per perso durig the summer moths. If the room(s) are used for 100 guest-ights he will have gross icome 40 x 100 = 4,000. Therefore ret a room relief ca be claimed, ad as the total icome is less that 4,250 it will all be tax free. Where the gross icome is more tha 4,250 per year, the the taxpayer has a choice: they ca claim ret a room relief which would mea that oly the excess of gross icome over 4,250 would be taxable (but o expeses could be claimed), or they ca igore ret a room relief ad calculate their profits from retig i the ormal way by deductig allowable expeses It would clearly make sese to choose the method that ivolves the lowest taxable amout! The time limit for makig a electio regardig whether ret a room relief is claimed is oe year after the 31 Jauary followig the ed of the tax year i.e. oe year after the olie retur is due. example A idividual rets out furished rooms i his house for a total of 7,000 per year. His allowable expeses based o apportioed heatig, lightig ad isurace costs amouts to 1,500 per year. He could claim ret a room relief, ad be taxed o 7,000 4,250 = 2,750. Alteratively he could elect to igore ret a room relief ad he would the be taxed o his retal profits calculated as follows: Gross Icome 7,000 less wear ad tear allowace (700) less other allowable expeses (1,500) Retal profit 4,800 I this situatio it is better to claim ret a room relief. Note that if ret a room relief is claimed o other deductios ca be claimed (ot eve wear ad tear allowace).

12 i c o m e f r o m p r o p e r t y Case Study P I E R S S O U T H : R E N T A R O O M R E L I E F Piers South lets out part of his home durig the holiday seaso. He lives i part of the buildig ad uses the whole of the first floor for guest accommodatio. He charges 50 per guest per ight (icludig breakfast), ad i the curret tax year let out rooms for 250 guest-ights. His expeses for the whole buildig were: Heatig ad lightig 2,000 Isurace 500 Mortgage iterest 1,800 I additio he spet 1,300 o guests breakfast food, 500 o lauderig guest s beddig, ad 1,000 employig a part time cleaer for the guest rooms. The guest accommodatio is 40% of the buildig, ad this has bee agreed as a appropriate way to apportio relevat costs. Note that this situatio qualifies as furished holiday lettigs (see ext sectio) ad therefore wear ad tear allowace caot be claimed. r e q u i r e d Calculate the amouts that would be subject to icome tax if either (a) ret a room relief was claimed, or (b) ormal retal profit calculatios were carried out Recommed whether ret a room relief should be claimed for this tax year. s o l u t i o (a) claimig ret a room relief Gross Icome (250 x 50) 12,500 Ret a room relief (4,250) Assessable amout 8,250

13 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l (b) ormal profit calculatio Gross Icome (250 x 50) 12,500 less: Breakfast food (1,300) Laudry expeses (500) Cleaer (1,000) Apportioed costs: Heatig ad lightig (2,000 x 40%) (800) Isurace (500 x 40%) (200) Mortgage iterest (1,800 x 40%) (720) Assessable amout 7,980 It is therefore better for Piers to use a ormal profit calculatio, ad ot claim ret a room relief i this case. H O L I D AY L E T S We used a example of holiday lets i the last case study, ad you ca see that whe the ormal profit calculatio is used the rules are geerally the same as for other property lettigs. However, the calculatio of the profit or loss o all holiday lets must be kept separate from other property retal. The followig are some of the mai icome tax poits about holiday lets or furished holiday lettigs as they are sometimes kow: holiday lets are eligible for ret a room relief if they are part of the idividual s mai home (as we have already see) mortgage iterest ca be claimed, except for the private part of a buildig although wear ad tear allowace caot be claimed for holiday lets, capital allowaces ca be claimed o (for example) furiture ad equipmet (we do t eed to cosider the calculatio of capital allowaces for this study area) pesio cotributios ca be claimed i respect of the icome from holiday lets (i a similar way to employmet icome see Chapter 4) a differet page o the tax retur is completed for holiday lets

14 i c o m e f r o m p r o p e r t y Holiday lets could apply to (for example): bed ad breakfast lettigs holiday cottages that are reted out caravas that are reted out To qualify as a holiday let, the operatio must be carried out commercially with a view to makig a profit. Lettig out a taxpayer s ow holiday home just to help with costs would ot qualify. I additio, the accommodatio must be available for public lettig for at least 210 days a year, ad be actually let for at least 105 days. To qualify as a holiday let, the same teat would ot ormally occupy the property for a cotiuous period of more tha 31 days. D E A L I N G W I T H P R O P E R T Y L O S S E S Earlier i this chapter we saw how a loss whe retig oe property is offset agaist profits for other properties i the same tax year, provided they are of a similar type, ie holiday let or o-holiday let. However, if either there are o other properties with profits i that tax year, or the et result from all the properties is a loss the the followig occurs: the property icome assessmet for the tax year is il, ad the loss must be carried forward util there is sufficiet future property icome to offset it The property loss ca oly be set agaist future property icome. If there are isufficiet property icome profits i the tax year that follows the loss, the the balace of the loss is carried forward agai util it ca be relieved. If the loss relates to a holiday let, the it must be kept separate ad relieved oly agaist a profit from other holday lets. The Case Study o the ext page demostrates how property losses are relieved.

15 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l Case Study I V O R C O S T: D E A L I N G W I T H L O S S E S Ivor Cost rets out several properties. Noe of these are holiday lets. After amalgamatig the rets from all his properties, ad deductig all allowable expeses he has arrived at the followig figures: Tax Year Profit / (Loss) 2012/13 (5,500) 2013/14 3, /15 6,400 r e q u i r e d Calculate the assessable property icome for each of the three tax years referred to. s o l u t i o Tax Year Workig Property Icome Assessmet 2012/13 loss of 5,500 Nil carried forward to ext year 2013/14 3,800 of loss used Nil agaist profit of 3,800. Balace of loss carried forward 2014/15 Profit 6,400 less balace of loss 1,700 4,700 C O M P L E T I N G T H E R E L E VA N T PA R T S O F T H E TA X R E T U R N I the first chapter we saw that a tax retur cosists of a mai sectio that is commo to all taxpayers, plus supplemetary pages that relate to specific situatios. Details of property icome or losses are etered o the supplemetary pages that we will look at ow. These two pages are headed UK Property. The first page, UKP 1 has a brief sectio for geeral iformatio. This icludes box 4 which is crossed if ret a room relief is claimed for gross icome uder the limit.

16 i c o m e f r o m p r o p e r t y The remaider of the first page relates to furished holiday lettigs (holiday lets). The boxes are fairly self-explaatory. Be careful to oly complete these sectios if the lettig qualifies as a holiday let. The profit or loss o furished holiday lettigs is recorded o page UKP1 quite separately from other property icome. Normal lettigs (furished or ufurished) are completed o the secod page, UKP 2. We will ow see how to complete this secod page (which is the more complicated of the two ad more likely to be tested). The page broadly follows the format of a property icome computatio, with sectios for: property icome, property expeses, ad calculatig your taxable profit or loss Sice the tax form is desiged to deal with more complicated situatios tha we eed to study, you will fid that we will ot eed some of the boxes. It is quite acceptable to leave boxes blak that do ot apply. Each box o the form is umbered for referece, ad the otes that follow should help you uderstad how the form works. Further guidace is available from the Notes o UK Property documet (SA105) that ca be foud o the HM Reveue & Customs website (www.hmrc.gov.uk), but ote that such documets caot be used i a examiatio. The followig sectios are o page UKP2 of the tax form (see page 2.17 for the 2013/14 versio) Property Icome Sectio Here you will oly eed to complete box 20 with the ret receivable. This excludes ay holiday lettig icome or profits that are show o page UKP1. Property Expeses Sectio You should aalyse the expeses (excludig ay wear ad tear allowace) ito boxes 24 to 29. Make sure that the figures recocile with your workigs. Calculatig your taxable profit or loss Sectio If there is ay wear ad tear allowace, this is iserted ito box 36. If you are claimig ret a room relief agaist gross icome, this is iserted ito box 37, but you caot also claim ay expeses. The adjusted profit for the year that you have calculated is iserted ito box 38. Ay loss brought forward from ormal lettigs is the etered ito box 39 ad the resultig taxable profit is etered i box 40. If there is a loss to be carried forward this is show i boxes 41 ad 43 (ad the box 40 must be il). Oce you have fiished fillig i this page, make sure that the figures agree with your earlier workigs, ad that the arithmetic is accurate.

17 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l

18 i c o m e f r o m p r o p e r t y

19 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l We will ow see how a completed page looks by usig the data from the earlier Case Study Ady Lord. Case Study A N D Y L O R D : C O M P L E T I N G T H E R E L E VA N T TA X R E T U R N PA G E S Ady Lord rets out three properties i High Street. Two of the properties are furished. The followig is a computatio of his property icome (usig the total colum take from the solutio to the Case Study o page 2.8). Retal Icome 12,800 less allowable expeses: Coucil Tax 900 Loa Iterest 4,790 Ret Payable 2,500 Property Isurace 517 Bad Debt 600 Roof Repairs 700 Other Repairs 650 Professioal Fees for Debt Recovery 150 Wear & Tear Allowace ,547 Assessable amout 1,253 r e q u i r e d Complete page UKP2 of the tax retur for Ady Lord. s o l u t i o The completed documet is reproduced o the opposite page. The followig workigs explai how each figure recociles with the property icome computatio. Note that we have used the 2013/14 form here, as the 2014/15 versio is ot available at the time of goig to press. Box No. Workigs ad Commets 20 Retal Icome (before ay deductios) 12, Coucil Tax Ret Paymet 2,500 + Property Isurace 517 = 3, Roof Repairs Other Repairs 650 = 1, Loa Iterest 4, Professioal Fees for Debt Recovery Bad Debt Wear & Tear Allowace The assessable profit for this year of 1, The figure from box 38 repeated (sice there are o losses brought forward i this case).

20 i c o m e f r o m p r o p e r t y

21 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l To esure that we ca also complete the retur for a holiday lets busiess, we will ow use the data from our earlier case study Piers South to illustrate completio of the retur. Case Study P I E R S S O U T H : C O M P L E T I N G TA X R E T U R N U K P R O P E R T Y PA G E S Piers South lets out part of his home durig the holiday seaso. It qualifies as a furished holiday lettigs busiess. He has already calculated his assessable property icome, ad decided that it is beeficial ot to claim ret a room relief, but istead to claim allowable expeses. His calculatio of assessable profit is as follows: Gross Icome (250 x 50) 12,500 less: Breakfast food (1,300) Laudry expeses (500) Cleaer (1,000) Apportioed costs: Heatig ad lightig (2,000 x 40%) (800) Isurace (500 x 40%) (200) Mortgage iterest (1,800 x 40%) (720) Assessable amout 7,980 r e q u i r e d Complete the relevat parts of the property icome pages for the busiess.

22 i c o m e f r o m p r o p e r t y s o l u t i o The completed form is show o the ext page. We have used the 2013/14 versio. These otes will explai how it has bee filled i. Page UKP 1 is the oly page required here Box 5 shows the icome of 12,500. Box 6 shows the total of all the costs except mortgage iterest. These costs have bee treated as costs of services provided, although some could arguably have bee iserted i box 9 as other allowable property expeses. Box 7 shows the mortgage iterest. Box 10 is left blak sice the private use adjustmets for 60% of the buildig expeses have already bee deducted i the calculatio of the amouts show i boxes 6 ad 7. Box 13 is a profit sub total, ad the figure is repeated i box 15 as there is o loss brought forward.

23 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l PI E RS S O U T H

24 i c o m e f r o m p r o p e r t y K E E P I N G R E C O R D S Records for property icome must ormally be kept for five years after the olie tax retur is due to be submitted. For the tax year 2014/15 the retur is due o 31 Jauary 2016, ad so the records must be kept util 31 Jauary Note that this is loger tha o-busiess records eed to be kept for tax purposes (oe year after the fial olie tax retur submissio date). The records should be able to substatiate the etries o the tax retur, ad would therefore typically iclude: accoutig records icludig cash books ad bak statemets retal agreemets ad other records of teacies ivoices or receipts for expeses paid workig papers for computatios copies of tax returs

25 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l Chapter Summary Icome from retig lad ad property is assessed uder property icome. The basis of assessmet for this is the icome relatig to the tax year, less allowable expeses, calculated o a accruals basis. The calculatio of the assessable amout is kow as a property icome computatio. Allowable expeses are those wholly ad exclusively for the busiess of lettigs. Irrecoverable ret is a allowable expese, as is a wear ad tear allowace for residetial property that is let furished. Expediture that is ot allowable icludes capital expediture ad ay form of depreciatio. Where more tha oe property is let, the results are combied ad ay idividual losses etted off agaist other properties with profits. Where the overall result is a loss, this is carried forward agaist future property icome profits. Losses for furished holiday lettigs ca oly be offset agaist profits from furished holiday lettigs. Similarly, o-holiday lettig losses ca oly be offset agaist o-holiday lettig profits. Ret a room relief ca apply where furished accommodatio is provided i a taxpayer s mai home. It ca exempt up to 4,250 of gross icome. There are supplemetary pages i the tax retur that relate to UK property. These must be completed accurately ad agree with the computatio. The relevat records must be retaied for five years after the submissio date for the olie tax retur.

26 i c o m e f r o m p r o p e r t y Key Terms Property Icome Accruals Basis Allowable Expediture Wear ad Tear Allowace Ret a Room Relief the term used to categorise icome from lad ad property (typically retal icome) this is where ormal accoutacy rules are followed, so that icome ad expediture is matched to the period of time that it relates to; property icome must be calculated by usig the accruals basis, matchig the profits to the tax year expediture that may be deducted from icome i the calculatio of profits or losses for tax purposes a allowable deductio from icome whe property is reted o a furished basis. It is calculated as 10% of the ret received after deductig coucil tax ad rates a relief that ca be claimed whe part of a mai home is reted out; it ca exempt up to 4,250 gross icome from tax Activities 2.1 Julie reted out her ufurished property from 6/7/2014, ad received 5,000 for 12 moth s ret i advace o that day. She also set up a direct debit paymet of 25 per moth for property isurace. I December 2014 she spet 200 for repairs followig a burst pipe. Calculate the assessable property icome for 2014/ Dave bought a ufurished office o 6/11/2014, ad immediately let it to a teat for 400 per moth, payable mothly. Dave paid 2,000 legal fees to acquire the office, ad paid mothly mortgage iterest relatig to the office of 150. He also paid 30 per moth property isurace. Dave used the services of a aget to collect the ret ad liaise with the teat. The aget charged 1,200 per year for this service. Calculate the assessable property icome for 2014/15.

27 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l 2.3 Aa Partemet rets out oe furished property. The followig is a statemet compiled from her accoutig records relatig to the tax year: Retal Icome Receivable 10,000 less expediture: Coucil Tax 700 Water Rates 300 Isurace 400 Cost of New Carpets 2,500 Depreciatio of Furiture 800 Maagig Aget s Charges 1,000 5,700 Profit 4,300 Required: Calculate the property icome for Aa for the tax year. 2.4 Soy Hill rets out three coutry cottages. All properties are furished. He has provided the followig statemet of icome ad expediture o the properties for the tax year: Property 1 Property 2 Property 3 Retal Icome 8,000 6,000 5,500 Less expeses: Coucil Tax Loa Iterest 3,600 2,000 4,000 Property Isurace Redecoratio Repaitig Widows Other Repairs 2, Accoutacy Fees Depreciatio ,850 5,050 6,000 Profit / (Loss) (850) 950 (500)

28 i c o m e f r o m p r o p e r t y You have also determied the followig facts: property umber three was purchased o 6 Jue. This property was reted out from 6 July. The coucil tax o this property relates to the ie moth period from 6 July. Other expeses relate to the te moth period from 6 Jue the loa iterest relates to mortgages obtaied to purchase the properties Other Repairs icludes 2,600 paid to istall cetral heatig i property umber oe where oe had previously existed Soy Hill has a urelieved property icome loss of 1,000 brought forward from the previous tax year Required: 1 Calculate the property icome for the tax year. 2 Complete the blak supplemetary page from the tax retur (see ext page for the 2013/14 versio). 2.5 Maisey Nett rets out oe furished property. The followig is a statemet compiled from her accoutig records relatig to the tax year. Retal Icome Receivable 11,500 less expediture: Accoutacy Fees 400 Coucil Tax 650 Water Rates 350 Isurace 300 Cost of New Furiture 2,000 Mortgage Iterest 2,300 Maagig Aget s Charges 1,000 7,000 Profit 4,500 Maisey also had gross icome of 41,500 i the tax year from her job as a legal executive. She paid 6,300 icome tax uder PAYE. Required: 1 Calculate the property icome for Maisey. 2 Calculate Maisey s total icome tax liability for the tax year, ad the part of that amout that she has yet to pay.

29 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l

30 i c o m e f r o m p r o p e r t y Simo has two properties i additio to his home, details of which are as follows: Three bedroom house: (1) This ufurished house is reted out for 900 per moth. The property was occupied this tax year util 1 September whe the teats suddely moved out, owig the ret for July ad August. Simo kows that he will ot recover this ret. The property was let agai from 1 December to aother family. (2) The oly expese paid by Simo o the house was 8% maagemet charge to the aget o ret received. Oe bedroom flat: (3) This furished flat is reted out for 450 per moth. The property was uoccupied this tax year util 1 Jue whe a couple moved i o a twelve moth lease. (4) Simo paid coucil tax ad water rates o the flat, totallig 1,400 for the period that the flat was occupied. He also paid isurace of 270 for the year. Calculate the profit or loss made o each property, usig the followig table. Three bedroom house Oe bedroom flat Icome Expeses:

31 p e r s o a l t a x ( F i a c e A c t ) t u t o r i a l 2.7 Select the statemets that are true from the followig: (a) (b) (c) (d) (e) (f) (g) The maximum amout of gross ret that ca be received tax free uder the ret a room scheme is 4,250. The ret a room scheme applies to ufurished accommodatio. Ret a room relief caot be claimed for guest houses. Taxpayers caot claim both ret a room relief ad wear ad tear allowace for the same property. If the gross ret receivable is over 4,250 taxpayers ca choose whether to claim ret a room relief or use a stadard profit calculatio. If you live i reted accommodatio you caot claim ret a room relief. Charges for goods or services like food or laudry are icluded whe calculatig the gross ret.

Sole trader financial statements

Sole trader financial statements 3 Sole trader fiacial statemets this chapter covers... I this chapter we look at preparig the year ed fiacial statemets of sole traders (that is, oe perso ruig their ow busiess). We preset the fiacial

More information

Corporation tax trading profits

Corporation tax trading profits 2 Corporatio tax tradig profits this chapter covers... I this chapter we provide a brief review of the Corporatio Tax computatio, ad examie the step by step procedures for compilig the computatio, before

More information

Current Year Income Assessment Form

Current Year Income Assessment Form Curret Year Icome Assessmet Form Academic Year 2015/16 Persoal details Perso 1 Your Customer Referece Number Your Customer Referece Number Name Name Date of birth Address / / Date of birth / / Address

More information

Information about Bankruptcy

Information about Bankruptcy Iformatio about Bakruptcy Isolvecy Service of Irelad Seirbhís Dócmhaieachta a héirea Isolvecy Service of Irelad Seirbhís Dócmhaieachta a héirea What is the? The Isolvecy Service of Irelad () is a idepedet

More information

FM4 CREDIT AND BORROWING

FM4 CREDIT AND BORROWING FM4 CREDIT AND BORROWING Whe you purchase big ticket items such as cars, boats, televisios ad the like, retailers ad fiacial istitutios have various terms ad coditios that are implemeted for the cosumer

More information

Statement of cash flows

Statement of cash flows 6 Statemet of cash flows this chapter covers... I this chapter we study the statemet of cash flows, which liks profit from the statemet of profit or loss ad other comprehesive icome with chages i assets

More information

I apply to subscribe for a Stocks & Shares ISA for the tax year 20 /20 and each subsequent year until further notice.

I apply to subscribe for a Stocks & Shares ISA for the tax year 20 /20 and each subsequent year until further notice. IFSL Brooks Macdoald Fud Stocks & Shares ISA Trasfer Applicatio Form IFSL Brooks Macdoald Fud Stocks & Shares ISA Trasfer Applicatio Form Please complete usig BLOCK CAPITALS ad retur the completed form

More information

This chapter describes how a business prepares the VAT Return the form on which: the output tax and input tax for the VAT period are summarised

This chapter describes how a business prepares the VAT Return the form on which: the output tax and input tax for the VAT period are summarised 4 The VAT Retur this chapter covers... This chapter describes how a busiess prepares the VAT Retur the form o which: the output tax ad iput tax for the VAT period are summarised the amout due to (or from)

More information

PFF2 2015/16. Assessment of Financial Circumstances For parents and partners of students. /SFEngland. /SF_England SFE/PFF2/1516/B

PFF2 2015/16. Assessment of Financial Circumstances For parents and partners of students. /SFEngland. /SF_England SFE/PFF2/1516/B PFF2 2015/16 Assessmet of Fiacial Circumstaces For parets ad parters of studets SFE/PFF2/1516/B /SF_Eglad /SFEglad Who should complete this form? Complete this form if you are: The studet s atural or adoptive

More information

How to use what you OWN to reduce what you OWE

How to use what you OWN to reduce what you OWE How to use what you OWN to reduce what you OWE Maulife Oe A Overview Most Caadias maage their fiaces by doig two thigs: 1. Depositig their icome ad other short-term assets ito chequig ad savigs accouts.

More information

INVESTMENT PERFORMANCE COUNCIL (IPC)

INVESTMENT PERFORMANCE COUNCIL (IPC) INVESTMENT PEFOMANCE COUNCIL (IPC) INVITATION TO COMMENT: Global Ivestmet Performace Stadards (GIPS ) Guidace Statemet o Calculatio Methodology The Associatio for Ivestmet Maagemet ad esearch (AIM) seeks

More information

INVESTMENT PERFORMANCE COUNCIL (IPC) Guidance Statement on Calculation Methodology

INVESTMENT PERFORMANCE COUNCIL (IPC) Guidance Statement on Calculation Methodology Adoptio Date: 4 March 2004 Effective Date: 1 Jue 2004 Retroactive Applicatio: No Public Commet Period: Aug Nov 2002 INVESTMENT PERFORMANCE COUNCIL (IPC) Preface Guidace Statemet o Calculatio Methodology

More information

CHAPTER 3 THE TIME VALUE OF MONEY

CHAPTER 3 THE TIME VALUE OF MONEY CHAPTER 3 THE TIME VALUE OF MONEY OVERVIEW A dollar i the had today is worth more tha a dollar to be received i the future because, if you had it ow, you could ivest that dollar ad ear iterest. Of all

More information

Amendments to employer debt Regulations

Amendments to employer debt Regulations March 2008 Pesios Legal Alert Amedmets to employer debt Regulatios The Govermet has at last issued Regulatios which will amed the law as to employer debts uder s75 Pesios Act 1995. The amedig Regulatios

More information

I apply to subscribe for a Stocks & Shares NISA for the tax year 2015/2016 and each subsequent year until further notice.

I apply to subscribe for a Stocks & Shares NISA for the tax year 2015/2016 and each subsequent year until further notice. IFSL Brooks Macdoald Fud Stocks & Shares NISA trasfer applicatio form IFSL Brooks Macdoald Fud Stocks & Shares NISA trasfer applicatio form Please complete usig BLOCK CAPITALS ad retur the completed form

More information

France caters to innovative companies and offers the best research tax credit in Europe

France caters to innovative companies and offers the best research tax credit in Europe 1/5 The Frech Govermet has three objectives : > improve Frace s fiscal competitiveess > cosolidate R&D activities > make Frace a attractive coutry for iovatio Tax icetives have become a key elemet of public

More information

Tenants handbook Booklet 4. Paying your rent. June 2015

Tenants handbook Booklet 4. Paying your rent. June 2015 Teats hadbook Booklet 4 Payig your ret Jue 2015 Your Ret ad other charges Payig your ret ad other charges is a coditio of your teacy. If you do ot pay, you will have broke your teacy agreemet with us.

More information

FI A CIAL MATHEMATICS

FI A CIAL MATHEMATICS CHAPTER 7 FI A CIAL MATHEMATICS Page Cotets 7.1 Compoud Value 117 7.2 Compoud Value of a Auity 118 7.3 Sikig Fuds 119 7.4 Preset Value 122 7.5 Preset Value of a Auity 122 7.6 Term Loas ad Amortizatio 123

More information

For customers Income protection the facts

For customers Income protection the facts For customers Icome protectio the facts We ve desiged this documet to give you more iformatio about our icome protectio beefits. It does t form part of ay cotract betwee you ad/or us. This iformatio refers

More information

For customers Key features of the Guaranteed Pension Annuity

For customers Key features of the Guaranteed Pension Annuity For customers Key features of the Guarateed Pesio Auity The Fiacial Coduct Authority is a fiacial services regulator. It requires us, Aego, to give you this importat iformatio to help you to decide whether

More information

5.4 Amortization. Question 1: How do you find the present value of an annuity? Question 2: How is a loan amortized?

5.4 Amortization. Question 1: How do you find the present value of an annuity? Question 2: How is a loan amortized? 5.4 Amortizatio Questio 1: How do you fid the preset value of a auity? Questio 2: How is a loa amortized? Questio 3: How do you make a amortizatio table? Oe of the most commo fiacial istrumets a perso

More information

CHAPTER 11 Financial mathematics

CHAPTER 11 Financial mathematics CHAPTER 11 Fiacial mathematics I this chapter you will: Calculate iterest usig the simple iterest formula ( ) Use the simple iterest formula to calculate the pricipal (P) Use the simple iterest formula

More information

Evidence requirements guide June 2016

Evidence requirements guide June 2016 INTERMEDIARIES & INVESTMENT PROFESSIONALS ONLY: NOT FOR PUBLIC DISTRIBUTION Page1of6 Evidece requiremets guide Jue 2016 The followig tables show our stadard documetatio requiremets for evidece. Sectio

More information

Comparing Credit Card Finance Charges

Comparing Credit Card Finance Charges Comparig Credit Card Fiace Charges Comparig Credit Card Fiace Charges Decidig if a particular credit card is right for you ivolves uderstadig what it costs ad what it offers you i retur. To determie how

More information

Get advice now. Are you worried about your mortgage? New edition

Get advice now. Are you worried about your mortgage? New edition New editio Jauary 2009 Are you worried about your mortgage? Get advice ow If you are strugglig to pay your mortgage, or you thik it will be difficult to pay more whe your fixed-rate deal eds, act ow to

More information

PENSION ANNUITY. Policy Conditions Document reference: PPAS1(7) This is an important document. Please keep it in a safe place.

PENSION ANNUITY. Policy Conditions Document reference: PPAS1(7) This is an important document. Please keep it in a safe place. PENSION ANNUITY Policy Coditios Documet referece: PPAS1(7) This is a importat documet. Please keep it i a safe place. Pesio Auity Policy Coditios Welcome to LV=, ad thak you for choosig our Pesio Auity.

More information

Cartrefi Hafod Lettings Agency

Cartrefi Hafod Lettings Agency Cartrefi Hafod Lettigs Agecy The ame you ca trust LANDLORD BOOKLET Cartrefi Hafod Lettigs Agecy Cartrefi Hafod Lettigs Agecy offer help to iexperieced ladlords to maage their homes. Hafod Housig Associatio

More information

auction a guide to buying at Residential

auction a guide to buying at Residential Residetial a guide to buyig at auctio Allsop is the market leader for residetial ad commercial auctios i the UK Aually sells approximately 1 billio of property at auctio i the UK Holds at least seve residetial

More information

Present Value Factor To bring one dollar in the future back to present, one uses the Present Value Factor (PVF): Concept 9: Present Value

Present Value Factor To bring one dollar in the future back to present, one uses the Present Value Factor (PVF): Concept 9: Present Value Cocept 9: Preset Value Is the value of a dollar received today the same as received a year from today? A dollar today is worth more tha a dollar tomorrow because of iflatio, opportuity cost, ad risk Brigig

More information

Simple Annuities Present Value.

Simple Annuities Present Value. Simple Auities Preset Value. OBJECTIVES (i) To uderstad the uderlyig priciple of a preset value auity. (ii) To use a CASIO CFX-9850GB PLUS to efficietly compute values associated with preset value auities.

More information

Savings and Retirement Benefits

Savings and Retirement Benefits 60 Baltimore Couty Public Schools offers you several ways to begi savig moey through payroll deductios. Defied Beefit Pesio Pla Tax Sheltered Auities ad Custodial Accouts Defied Beefit Pesio Pla Did you

More information

RISK TRANSFER FOR DESIGN-BUILD TEAMS

RISK TRANSFER FOR DESIGN-BUILD TEAMS WILLIS CONSTRUCTION PRACTICE I-BEAM Jauary 2010 www.willis.com RISK TRANSFER FOR DESIGN-BUILD TEAMS Desig-builD work is icreasig each quarter. cosequetly, we are fieldig more iquiries from cliets regardig

More information

INDEPENDENT BUSINESS PLAN EVENT 2016

INDEPENDENT BUSINESS PLAN EVENT 2016 INDEPENDENT BUSINESS PLAN EVENT 2016 The Idepedet Busiess Pla Evet ivolves the developmet of a comprehesive proposal to start a ew busiess. Ay type of busiess may be used. The Idepedet Busiess Pla Evet

More information

Basic Current Account

Basic Current Account Curret Accouts Basic Curret Accout Applicatio form Please fill i the form usig BLOCK CAPITALS ad black ik. Tick ay boxes which apply. Satader is able to provide literature i alterative formats. The formats

More information

.04. This means $1000 is multiplied by 1.02 five times, once for each of the remaining sixmonth

.04. This means $1000 is multiplied by 1.02 five times, once for each of the remaining sixmonth Questio 1: What is a ordiary auity? Let s look at a ordiary auity that is certai ad simple. By this, we mea a auity over a fixed term whose paymet period matches the iterest coversio period. Additioally,

More information

Investing in Stocks WHAT ARE THE DIFFERENT CLASSIFICATIONS OF STOCKS? WHY INVEST IN STOCKS? CAN YOU LOSE MONEY?

Investing in Stocks WHAT ARE THE DIFFERENT CLASSIFICATIONS OF STOCKS? WHY INVEST IN STOCKS? CAN YOU LOSE MONEY? Ivestig i Stocks Ivestig i Stocks Busiesses sell shares of stock to ivestors as a way to raise moey to fiace expasio, pay off debt ad provide operatig capital. Ecoomic coditios: Employmet, iflatio, ivetory

More information

CCH Accountants Starter Pack

CCH Accountants Starter Pack CCH Accoutats Starter Pack We may be a bit smaller, but fudametally we re o differet to ay other accoutig practice. Util ow, smaller firms have faced a stark choice: Buy cheaply, kowig that the practice

More information

Present Value Tax Expenditure Estimate of Tax Assistance for Retirement Saving

Present Value Tax Expenditure Estimate of Tax Assistance for Retirement Saving Preset Value Tax Expediture Estimate of Tax Assistace for Retiremet Savig Tax Policy Brach Departmet of Fiace Jue 30, 1998 2 Preset Value Tax Expediture Estimate of Tax Assistace for Retiremet Savig This

More information

In addition to information provided under the regular headings, this issue of Tax Briefing contains:

In addition to information provided under the regular headings, this issue of Tax Briefing contains: Tax Briefig ISSUE 11 - July 1993 Itroductio I additio to iformatio provided uder the regular headigs, this issue of Tax Briefig cotais: Prelimiary iformatio regardig the Amesty - see opposite A summary

More information

Bajaj Allianz General Insurance Company Limited

Bajaj Allianz General Insurance Company Limited Bajaj Alliaz Geeral Isurace Compay Limited Regd. Office & Head Office : GE Plaza, Airport Road, Yerawada, Pue - 411 006. PROPOSAL FORM FOR OFFICE COVER Importat : This proposal for isurace will be the

More information

Flexible Trust. (Settlor as trustee with optional survivorship clause) Your questions answered. What is a trust? What is a Flexible Trust?

Flexible Trust. (Settlor as trustee with optional survivorship clause) Your questions answered. What is a trust? What is a Flexible Trust? Flexible Trust (Settl as trustee with optioal survivship clause) Your questios aswered Uderstadig trusts ad their implicatios ca be pretty complicated. You should always get advice from your legal adviser

More information

Life Insurance: Your Blueprint for Wealth Transfer Planning. Producer Guide to Private Split Dollar Arrangements. Your future. Made easier.

Life Insurance: Your Blueprint for Wealth Transfer Planning. Producer Guide to Private Split Dollar Arrangements. Your future. Made easier. Life Isurace: Your Blueprit for Wealth Trasfer Plaig Producer Guide to Private Split Dollar Arragemets These materials are ot iteded to be used to avoid tax pealties ad were prepared to support the promotio

More information

where: T = number of years of cash flow in investment's life n = the year in which the cash flow X n i = IRR = the internal rate of return

where: T = number of years of cash flow in investment's life n = the year in which the cash flow X n i = IRR = the internal rate of return EVALUATING ALTERNATIVE CAPITAL INVESTMENT PROGRAMS By Ke D. Duft, Extesio Ecoomist I the March 98 issue of this publicatio we reviewed the procedure by which a capital ivestmet project was assessed. The

More information

PAYG instalments how to complete your activity statement

PAYG instalments how to complete your activity statement Istructios for busiesses ad ivestors PAYG istalmets how to complete your activity statemet For more iformatio visit www.ato.gov.au NAT 7393-11.2012 Our commitmet to you We are committed to providig you

More information

Institute of Actuaries of India Subject CT1 Financial Mathematics

Institute of Actuaries of India Subject CT1 Financial Mathematics Istitute of Actuaries of Idia Subject CT1 Fiacial Mathematics For 2014 Examiatios Subject CT1 Fiacial Mathematics Core Techical Aim The aim of the Fiacial Mathematics subject is to provide a groudig i

More information

ODBC. Getting Started With Sage Timberline Office ODBC

ODBC. Getting Started With Sage Timberline Office ODBC ODBC Gettig Started With Sage Timberlie Office ODBC NOTICE This documet ad the Sage Timberlie Office software may be used oly i accordace with the accompayig Sage Timberlie Office Ed User Licese Agreemet.

More information

I. Why is there a time value to money (TVM)?

I. Why is there a time value to money (TVM)? Itroductio to the Time Value of Moey Lecture Outlie I. Why is there the cocept of time value? II. Sigle cash flows over multiple periods III. Groups of cash flows IV. Warigs o doig time value calculatios

More information

Definition. A variable X that takes on values X 1, X 2, X 3,...X k with respective frequencies f 1, f 2, f 3,...f k has mean

Definition. A variable X that takes on values X 1, X 2, X 3,...X k with respective frequencies f 1, f 2, f 3,...f k has mean 1 Social Studies 201 October 13, 2004 Note: The examples i these otes may be differet tha used i class. However, the examples are similar ad the methods used are idetical to what was preseted i class.

More information

Don t include utility bills as a financial commitment, for example, TV licence, mobile phone bills, gas bills, electric bills etc. Sept 2015.

Don t include utility bills as a financial commitment, for example, TV licence, mobile phone bills, gas bills, electric bills etc. Sept 2015. Cofirmatio of Household Fiacial Commitmets f Depedats Grats - Academic Year 2014/15 Studet details Customer Referece Number the studet fiace experts Feame(s) Surame About this fm Complete this fm to tell

More information

For customers Key features of the Business Protection policy

For customers Key features of the Business Protection policy For customers Key features of the Busiess Protectio policy The Fiacial Coduct Authority is a fiacial services regulator. It requires us, Aego, to give you this importat iformatio to help you to decide

More information

MainStay Funds IRA/SEP/Roth IRA Distribution Form

MainStay Funds IRA/SEP/Roth IRA Distribution Form MaiStay Fuds IRA/SEP/Roth IRA Distributio Form Do ot use for IRA Trasfers or SIMPLE IRA INSTRUCTIONS Before completig this form, please refer to the applicable Custodial Agreemet ad Disclosure Statemet

More information

Guide for Canadian Small Businesses

Guide for Canadian Small Businesses Guide for Caadia Small Busiesses 5&(5HY T he success of small busiess is a essetial part of Caada s ecoomic growth. At the Caada Customs ad Reveue Agecy (CCRA), our goal is to provide all the support

More information

Subject CT5 Contingencies Core Technical Syllabus

Subject CT5 Contingencies Core Technical Syllabus Subject CT5 Cotigecies Core Techical Syllabus for the 2015 exams 1 Jue 2014 Aim The aim of the Cotigecies subject is to provide a groudig i the mathematical techiques which ca be used to model ad value

More information

International Delegation A summary for financial advisers

International Delegation A summary for financial advisers Iteratioal Delegatio A summary for fiacial advisers Cotets Please ote For fiacial adviser use oly. It should ot be distributed to, or relied upo by, retail cliets. AXA Wealth Iteratioal is the brad used

More information

Terminology for Bonds and Loans

Terminology for Bonds and Loans ³ ² ± Termiology for Bods ad Loas Pricipal give to borrower whe loa is made Simple loa: pricipal plus iterest repaid at oe date Fixed-paymet loa: series of (ofte equal) repaymets Bod is issued at some

More information

INCOME PROTECTION POLICY CONDITIONS GUARANTEED PREMIUMS

INCOME PROTECTION POLICY CONDITIONS GUARANTEED PREMIUMS INCOME PROTECTION POLICY CONDITIONS GUARANTEED PREMIUMS Documet referece: MIMIIP12G This is a imptat documet Please keep it i a safe place. Icome Protectio Guarateed Premiums Policy Coditios Welcome to

More information

summary of cover FUNERAL DIRECTORS BUSINESS INSURANCE

summary of cover FUNERAL DIRECTORS BUSINESS INSURANCE summary of cover FUNERAL DIRECTORS BUSINESS INSURANCE INSURANCE PROVIDED BY INSURANCE ARRANGED BY Cotets Itroductio 3 Property damage 4 Property damage plus 6 Equipmet breakdow 7 Busiess iterruptio 9 Liabilities

More information

Best of security and convenience

Best of security and convenience Get More with Additioal Cardholders. Importat iformatio. Add a co-applicat or authorized user to your accout ad you ca take advatage of the followig beefits: RBC Royal Bak Visa Customer Service Cosolidate

More information

Chapter 5 Unit 1. IET 350 Engineering Economics. Learning Objectives Chapter 5. Learning Objectives Unit 1. Annual Amount and Gradient Functions

Chapter 5 Unit 1. IET 350 Engineering Economics. Learning Objectives Chapter 5. Learning Objectives Unit 1. Annual Amount and Gradient Functions Chapter 5 Uit Aual Amout ad Gradiet Fuctios IET 350 Egieerig Ecoomics Learig Objectives Chapter 5 Upo completio of this chapter you should uderstad: Calculatig future values from aual amouts. Calculatig

More information

How to read A Mutual Fund shareholder report

How to read A Mutual Fund shareholder report Ivestor BulletI How to read A Mutual Fud shareholder report The SEC s Office of Ivestor Educatio ad Advocacy is issuig this Ivestor Bulleti to educate idividual ivestors about mutual fud shareholder reports.

More information

e-trader user guide Introduction

e-trader user guide Introduction User guide e-trader user guide Itroductio At UK Geeral our aim is to provide you with the best possible propositio for you ad your customers. We believe i offerig brokers a choice of how they trade with

More information

5/gallon. Earn. Then save. Cash Management. Control. Must Apply by 6/30/16. Save 25 /gallon on fuel purchases for the first 2 billing periods * ; then

5/gallon. Earn. Then save. Cash Management. Control. Must Apply by 6/30/16. Save 25 /gallon on fuel purchases for the first 2 billing periods * ; then Ear The save 25/gallo for the first 2 billig periods o fuel purchases with the ExxoMobil Busiess Card. * No miimum purchase requiremets ad o maximum savigs cap. Limited-time offer. Must apply by 6/30/16.

More information

Arithmetic Sequences and Partial Sums. Arithmetic Sequences. Definition of Arithmetic Sequence. Example 1. 7, 11, 15, 19,..., 4n 3,...

Arithmetic Sequences and Partial Sums. Arithmetic Sequences. Definition of Arithmetic Sequence. Example 1. 7, 11, 15, 19,..., 4n 3,... 3330_090.qxd 1/5/05 11:9 AM Page 653 Sectio 9. Arithmetic Sequeces ad Partial Sums 653 9. Arithmetic Sequeces ad Partial Sums What you should lear Recogize,write, ad fid the th terms of arithmetic sequeces.

More information

CDs Bought at a Bank verses CD s Bought from a Brokerage. Floyd Vest

CDs Bought at a Bank verses CD s Bought from a Brokerage. Floyd Vest CDs Bought at a Bak verses CD s Bought from a Brokerage Floyd Vest CDs bought at a bak. CD stads for Certificate of Deposit with the CD origiatig i a FDIC isured bak so that the CD is isured by the Uited

More information

Time Value of Money. First some technical stuff. HP10B II users

Time Value of Money. First some technical stuff. HP10B II users Time Value of Moey Basis for the course Power of compoud iterest $3,600 each year ito a 401(k) pla yields $2,390,000 i 40 years First some techical stuff You will use your fiacial calculator i every sigle

More information

Introducing Your New Wells Fargo Trust and Investment Statement. Your Account Information Simply Stated.

Introducing Your New Wells Fargo Trust and Investment Statement. Your Account Information Simply Stated. Itroducig Your New Wells Fargo Trust ad Ivestmet Statemet. Your Accout Iformatio Simply Stated. We are pleased to itroduce your ew easy-to-read statemet. It provides a overview of your accout ad a complete

More information

summary of cover CONTRACT WORKS INSURANCE

summary of cover CONTRACT WORKS INSURANCE 1 SUMMARY OF COVER CONTRACT WORKS summary of cover CONTRACT WORKS INSURANCE This documet details the cover we ca provide for our commercial or church policyholders whe udertakig buildig or reovatio works.

More information

About our services and costs

About our services and costs About our services ad costs Cotets Whose products do we offer 2 Ivestmet 2 Isurace 2 Mortgages 2 Which services will we provide you with? 3 Ivestmet 3 Isurace 3 Mortgages 3 What will you have to pay us

More information

REFURBISHMENTS AND AUGMENTATIONS

REFURBISHMENTS AND AUGMENTATIONS INTRODUCTION TIER WORKING PAPER No. 0 REFURBISHMENTS AND AUGMENTATIONS Workig Paper No. How Water Prices are Set provided a overview of how water prices are set o the basis of lower boud costs. As oted

More information

Pre-Suit Collection Strategies

Pre-Suit Collection Strategies Pre-Suit Collectio Strategies Writte by Charles PT Phoeix How to Decide Whether to Pursue Collectio Calculatig the Value of Collectio As with ay busiess litigatio, all factors associated with the process

More information

What Newcomers Need to Know

What Newcomers Need to Know Retig Your First Home i Caada What Newcomers Need to Kow A Home of Your Ow If you are ew to Caada, oe of the first thigs you will probably eed to do is fid a place you ad your family ca call home. For

More information

How to set up your GMC Online account

How to set up your GMC Online account How to set up your GMC Olie accout Mai title Itroductio GMC Olie is a secure part of our website that allows you to maage your registratio with us. Over 100,000 doctors already use GMC Olie. We wat every

More information

Holiday Park Holiday Home Ownership Code of Practice

Holiday Park Holiday Home Ownership Code of Practice The UK trade body for the tourer, motorhome, holiday home ad park home idustries www.thecc.org.uk Holiday Park Holiday Home Owership Code of Practice For the purchase ad sale of ew ad pre-owed Holiday

More information

BENEFIT-COST ANALYSIS Financial and Economic Appraisal using Spreadsheets

BENEFIT-COST ANALYSIS Financial and Economic Appraisal using Spreadsheets BENEIT-CST ANALYSIS iacial ad Ecoomic Appraisal usig Spreadsheets Ch. 2: Ivestmet Appraisal - Priciples Harry Campbell & Richard Brow School of Ecoomics The Uiversity of Queeslad Review of basic cocepts

More information

PROPERTY OWNERS INSURANCE POLICY SUMMARY

PROPERTY OWNERS INSURANCE POLICY SUMMARY PROPERTY OWNERS INSURANCE POLICY SUMMARY PROPERTY OWNERS INSURANCE POLICY SUMMARY This documet is a summary of your Policy ad other key iformatio about the isurace cover that you should read. It does ot

More information

Soving Recurrence Relations

Soving Recurrence Relations Sovig Recurrece Relatios Part 1. Homogeeous liear 2d degree relatios with costat coefficiets. Cosider the recurrece relatio ( ) T () + at ( 1) + bt ( 2) = 0 This is called a homogeeous liear 2d degree

More information

Holiday Park Holiday Home Ownership Code of Practice

Holiday Park Holiday Home Ownership Code of Practice The UK trade body for the tourer, motorhome, holiday home ad park home idustries www.thecc.org.uk Holiday Park Holiday Home Owership Code of Practice For the purchase ad sale of ew ad pre-owed Holiday

More information

Indexed Survivor Universal Life. Agent product guide 15887 7/10

Indexed Survivor Universal Life. Agent product guide 15887 7/10 Idexed Survivor Uiversal Life Aget product guide 15887 7/10 Idexed Survivor Uiversal Life is a flexible premium survivor uiversal life isurace policy with a idex-liked iterest creditig feature. Buildig

More information

Grow your business with savings and debt management solutions

Grow your business with savings and debt management solutions Grow your busiess with savigs ad debt maagemet solutios A few great reasos to provide bak ad trust products to your cliets You have the expertise to help your cliets get the best rates ad most competitive

More information

A Guide to the Pricing Conventions of SFE Interest Rate Products

A Guide to the Pricing Conventions of SFE Interest Rate Products A Guide to the Pricig Covetios of SFE Iterest Rate Products SFE 30 Day Iterbak Cash Rate Futures Physical 90 Day Bak Bills SFE 90 Day Bak Bill Futures SFE 90 Day Bak Bill Futures Tick Value Calculatios

More information

Direct Online Mortgage application

Direct Online Mortgage application Virgi Moey plc Direct Olie Mortgage applicatio Welcome to Virgi Moey plc. Thak you for choosig a mortgage with us. I this applicatio form, refereces to we, us ad our are refereces to Virgi Moey plc ad

More information

(VCP-310) 1-800-418-6789

(VCP-310) 1-800-418-6789 Maual VMware Lesso 1: Uderstadig the VMware Product Lie I this lesso, you will first lear what virtualizatio is. Next, you ll explore the products offered by VMware that provide virtualizatio services.

More information

Center, Spread, and Shape in Inference: Claims, Caveats, and Insights

Center, Spread, and Shape in Inference: Claims, Caveats, and Insights Ceter, Spread, ad Shape i Iferece: Claims, Caveats, ad Isights Dr. Nacy Pfeig (Uiversity of Pittsburgh) AMATYC November 2008 Prelimiary Activities 1. I would like to produce a iterval estimate for the

More information

Tax Return Transcript

Tax Return Transcript Tax Return Transcript 432-35-1624 1040 2005 GODW Page 2 of 8 This Product Contains Sensitive Taxpayer Data Tax Return Transcript SS Provided: 432-xx-xxxx Tax Period Ending: Dec. 31, 2005 Request Date:

More information

Baan Finance Accounts Payable

Baan Finance Accounts Payable Baa Fiace Accouts Payable Module Procedure UP035A US Documetiformatio Documet Documet code : UP035A US Documet group : User Documetatio Documet title : Accouts Payable Applicatio/Package : Baa Fiace Editio

More information

Checking Accounts and Banking Services

Checking Accounts and Banking Services Chapter 9 Checkig Accouts ad Bakig Services 9.1 Checkig Accouts 9.2 Bakig Services ad Fees Cosider THIS Rochelle works part time after school ad oe weeked a moth. She receives a paycheck oce a week from

More information

For customers Whole of Life. Policy conditions. Pays a lump sum on death or diagnosis of a defined terminal illness.

For customers Whole of Life. Policy conditions. Pays a lump sum on death or diagnosis of a defined terminal illness. For customers Whole of Life Policy coditios Pays a lump sum o death or diagosis of a defied termial illess. Cotets Welcome to Aego 03 What we mea by you 03 Your cotract 03 Plai Eglish 03 Cotact us 03 1

More information

Confidence Intervals for One Mean

Confidence Intervals for One Mean Chapter 420 Cofidece Itervals for Oe Mea Itroductio This routie calculates the sample size ecessary to achieve a specified distace from the mea to the cofidece limit(s) at a stated cofidece level for a

More information

LEASE-PURCHASE DECISION

LEASE-PURCHASE DECISION Public Procuremet Practice STANDARD The decisio to lease or purchase should be cosidered o a case-by case evaluatio of comparative costs ad other factors. 1 Procuremet should coduct a cost/ beefit aalysis

More information

Handling. Collection Calls

Handling. Collection Calls Hadlig the Collectio Calls We do everythig we ca to stop collectio calls; however, i the early part of our represetatio, you ca expect some of these calls to cotiue. We uderstad that the first few moths

More information

BUY TO LET MORTGAGE APPLICATION FORM

BUY TO LET MORTGAGE APPLICATION FORM BUY TO LET MORTGAGE APPLICATION FORM STAGE 2 OF 2 Please submit Stage 2 form to upgrade to full applicatio oce customer has read ad accepted the Mortgage Illustratio. Please complete this page if form

More information

TIAA-CREF Wealth Management. Personalized, objective financial advice for every stage of life

TIAA-CREF Wealth Management. Personalized, objective financial advice for every stage of life TIAA-CREF Wealth Maagemet Persoalized, objective fiacial advice for every stage of life A persoalized team approach for a trusted lifelog relatioship No matter who you are, you ca t be a expert i all aspects

More information

Personal Retirement Savings Accounts (PRSAs) A consumer and employers guide to PRSAs

Personal Retirement Savings Accounts (PRSAs) A consumer and employers guide to PRSAs Persoal Retiremet Savigs Accouts (PRSAs) A cosumer ad employers guide to PRSAs www.pesiosauthority.ie The Pesios Authority Verschoyle House 28/30 Lower Mout Street Dubli 2 Tel: (01) 613 1900 Locall: 1890

More information

New job at the Japanese company, would like to know about the health insurance. What's the process to apply for the insurance?

New job at the Japanese company, would like to know about the health insurance. What's the process to apply for the insurance? Cabiet ねん かせんぶ ねん しゅが かせんぶ じてん しゅうせい 8-4-2 (2008 年 下 線 部 &2009 年 朱 書 き 下 線 部 時 点 修 正 ) Level 3 Chapter Illess Sectio Public health isurace Cotets Health isurace 1 Possible questio ad backgroud. New job

More information

Unit 20 Hypotheses Testing

Unit 20 Hypotheses Testing Uit 2 Hypotheses Testig Objectives: To uderstad how to formulate a ull hypothesis ad a alterative hypothesis about a populatio proportio, ad how to choose a sigificace level To uderstad how to collect

More information

A GUIDE TO BUILDING SMART BUSINESS CREDIT

A GUIDE TO BUILDING SMART BUSINESS CREDIT A GUIDE TO BUILDING SMART BUSINESS CREDIT Establishig busiess credit ca be the key to growig your compay DID YOU KNOW? Busiess Credit ca help grow your busiess Soud paymet practices are key to a solid

More information

Enhance Your Financial Legacy Variable Annuities with Death Benefits from Pacific Life

Enhance Your Financial Legacy Variable Annuities with Death Benefits from Pacific Life Ehace Your Fiacial Legacy Variable Auities with Death Beefits from Pacific Life 9/15 20188-15C FOR CALIFORNIA As You Pla for Retiremet, Protect Your Loved Oes A Pacific Life variable auity ca offer three

More information

TO: Users of the ACTEX Review Seminar on DVD for SOA Exam FM/CAS Exam 2

TO: Users of the ACTEX Review Seminar on DVD for SOA Exam FM/CAS Exam 2 TO: Users of the ACTEX Review Semiar o DVD for SOA Exam FM/CAS Exam FROM: Richard L. (Dick) Lodo, FSA Dear Studets, Thak you for purchasig the DVD recordig of the ACTEX Review Semiar for SOA Exam FM (CAS

More information

HSAs the American Fidelity Way:

HSAs the American Fidelity Way: Health Ser vices Admiistratio, LLC HSAs the America Fidelity Way: Kowledge, Experiece, Commitmet With over 30 years experiece i providig pre-tax services, America Fidelity is a pioeer i Sectio 125 flexible

More information

Example 2 Find the square root of 0. The only square root of 0 is 0 (since 0 is not positive or negative, so those choices don t exist here).

Example 2 Find the square root of 0. The only square root of 0 is 0 (since 0 is not positive or negative, so those choices don t exist here). BEGINNING ALGEBRA Roots ad Radicals (revised summer, 00 Olso) Packet to Supplemet the Curret Textbook - Part Review of Square Roots & Irratioals (This portio ca be ay time before Part ad should mostly

More information