Raising Individual Financial Awareness
ACFI4006 Semester 1 2019-20
Coursework 3 – Individual Assignment – total 50% of the module.
PART A
Answer questions 1 and 2. You must use the format taught in class to obtain full marks. All questions indicate the marks available.
PART B
Attach the budget that you submitted in week 3 with actual figures for the 10-week period included.
Your assignment must be presented in the format shown in the module guide under Assessment Information.
Question 1
In the tax year 2019/20 Henry Murray has:
- Been working as a finance manager earning £75,000 per annum. He is provided with a petrol car by his employer, list price £24,000, with CO2 emissions of 123g/km. His employer pays for all the fuel for the car. He is also provided with a parking space at work in the centre of London that is worth £875 a year. There is a staff canteen available to all staff where Henry has a subsidised lunch each day; this costs him £1.50 and he estimates an equivalent meal elsewhere would be approximately £5.50. Henry had to pay professional subscriptions to the ICAEW of £395 this year.
- During the year Henry received interest on his bank savings account of £1,600 and dividends of £1,825. He has an ISA, on which he received £750 of interest during the year.
- In August 2019 Henry sold a painting for £23,400. He had to pay £400 for special packaging and agents fees of £1,000 from the proceeds. He bought the painting years ago at an auction for £250. In 1999 he had the the frame repaired at a cost of £75.
- Henry also runs his own consultancy business, teaching personal finance workshops. This year he made profits of £7,800 after deducting personal withdrawals of £3,000. He kept accurate mileage logs and charged £245 in business petrol costs to arrive at this profit, and also deducted the cost of gifts to his clients, amounting to £970.
Required:
Calculate Henry’s income tax liability for the year 2019/20. (25 marks)
Calculate Henry’s capital gains tax liability for the year 2019/20. What rate of tax will he pay on this gain? (4 marks)
29 marks
Question 2
Anne Murray is planning to buy a property, in addition to the family home she and Henry own, for rental purposes. She is considering a property in Bristol costing £250,000. She has savings of £70,000, which she will use as a deposit, but will need to borrow the remaining amount for the purchase. She requests you to research and find a suitable buy-to-let mortgage for her.
She also wants to know what income she might expect to get as a return on her investment. Local agents have estimated that the monthly rent may be £1,850 per month, with agent’s fees for managing the property being charged at 5% of the rent.
Having found a relevant real product for the mortgage, work out an estimation of the relevant costs of renting the property and the net rental income that she might expect to get annually. Anne estimates some of the other costs she will incur as follows:
| Repairs and maintenance per year | £1,700 |
| Property insurance per year | £395 |
| Surveyors fees | £375 |
| Solicitors conveyancing fees | £1350 |
| Gardener | £1250 |
Required:
- Find a real buy-to-let mortgage for Anne and explain the details to her.
3 marks
- Which of the above expenses can only be claimed against Capital Gains tax?
1 mark
- Calculate the net annual income (for income tax purposes) that Anne can expect from her rental property. 6 marks
- Calculate the potential return on income from her investment (ROI). 2 marks
-
What
are the two main taxes on a rental property and against which tax
can SDLT be deducted?
Calculate the SDLT on this purchase. 4 marks
16 marks
PART B
Refer to the brief for Assignment 1, your Personal Budget.
Attach the budget that you submitted in week 3 and include, in addition, the actual figures for the 10-week period.
This should include:
- Your original predicted budget figures for the first 10 weeks of the semester, as submitted in week 3.
- The actual figures for income and expenditure for the same period (10 weeks) in the column beside the predicted figures.
-
In
100 words, at the bottom of your budget, your reflections on:
– the reasons for the differences between the actual figures and the budget figures and
– what you have learned from this exercise.
[Do not repeat detail that is in the budget; use your 100 words well.]
Show a word count for your reflection, which must not exceed 100 words.
You
must submit both your budget and actual figures to receive the marks;
do not submit the actual figures on their own.
Marks: This part of the assignment is worth 5% of the total module marks.
Submission: The completed assignment (both Parts A and B) must be submitted electronically via drop-box on Moodle. You should submit a single file in .pdf format.
Deadline: The complete coursework (Parts A & B) is due in on Thursday 5th December (week 11) by 13.00.
Late submission of work:
Students who submit work late will receive a mark of ZERO for that element of assessment. Read the regulations below about late submission of work carefully. These are University regulations and must be followed. https://www.brookes.ac.uk/students/your-studies/projects-and-dissertations/
Specifications & anonymous marking:
No handwritten coursework is accepted; you must use Word or Excel. You must include your student number in the name of electronic files that you upload preferably in the header/footer of your document. We use this should we need to contact you if, for instance, your submission did not upload correctly.
Queries:
If you have any queries on the coursework, please do not ask your seminar leader but post the query on the coursework assessment forum on Moodle. This ensures that all students have access to any queries and responses.
Feedback:
Part 2 of your coursework will be returned after the end of the semester with feedback. You will be expected to use this feedback to help you improve your performance on other assignments in your degree programme, and to assist you in preparing future budgets for yourself.
Exceptional Circumstances Policy:
If circumstances outside of your control (for example, medical circumstances) affect your ability to meet an assessment deadline or attend an assessment event (e.g. examination, presentation) then it is ESSENTIAL that you access and utilise the Exceptional Circumstances Policy.
Please see the Programme Handbook for an outline of the principles and operation of the Exceptional Circumstances Policy within Oxford Brookes University and links to the University Regulations.
Where can I find out more?
The advice and guidance landing page link is https://www.brookes.ac.uk/students/your-studies/exceptional-circumstances/
Students may exceptionally secure a 24 hour grace period if last minute untoward circumstances affect your ability to submit on time. You must register to use this facility. [Please note: over-use of this facility will be reviewed.]
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| Assessment criteria ACFI4006 2019-20 Semester 1 Coursework 3 | ||||
|
| PART A | Marks: | Given | Total | |
| 1a | Has income of every type been correctly laid out and calculated? |
|
|
/ |
7 |
| 1b | Was tax payable on each type of income correctly calculated? |
|
|
/ |
9 |
| 1c | Has the car benefit-in-kind percentage been correctly calculated & used for the car and fuel benefit? |
|
|
/ |
6 |
| 1d | Were profits from self-employment correctly adjusted? |
|
|
/ |
3 |
| 1e | Has the capital gain been correctly calculated and taxed? |
|
|
/ |
4 |
|
|
|
| 29 |
|
|
| 2a | Has a real mortgage been found, and sufficient details given? |
|
|
/ |
3 |
| 2b | Have the capital expenses been correctly identified? |
|
|
/ |
1 |
| 2c | Has the potential rental income been accurately calculated & presented as stated? |
|
|
/ |
6 |
| 2d | Has the ROI been accurately calculated? |
|
|
/ |
2 |
| 2e | Have taxes been correctly identified? Has the SDLT on the purchase been correctly calculated? |
|
|
/ |
4 |
|
| PART B |
| 16 |
|
|
|
|
Have
actual figures been submitted along with the budget? Have reflections been included? |
|
|
/ |
5 |
|
|
| Total mark: | 0 | / | 50 |
|
|
| Percentage: | 0% |
|
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