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Taxation Of Individuals Notes

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Income Tax

1) Total Income

Calculation

Cumulative total of all included income
PS50,000 + PS2000 + PS1000 = PS53,000

Includes

1) Salary
PS50,000

2) Bank interest Want it to be gross

Bank interest - Gross
PS2000

Bank interest - Net (have to convert to gross)
PS1600 x

3) Dividends Want them to be gross

100 80

= PS2000

Dividends - Gross
PS1000

Dividends - Net (have to convert to gross)
PS900 x 100 90

Does not include

1) Gaming and betting prices

2) Income from ISAs

3) Income from a Child Trust Fund

4) Compensation for loss of employment up to PS30,000

5) Periodic compensation payments for PI payouts

6) Redundancy payments

= PS1000

2) Net income

Calculation

Total income (1) MINUS allowable deductions
PS53,000 MINUS PS7,000

Includes

= PS46,000

1) Pension Scheme contributions Total = PS5000

2) Charges on income

*
Loans to buy an interest in a partnership

*
Loans to contribute capital to a partnership

*
Loans to buy shares in a close company

*
Loans to buy shares in an employee controlled company or invest in a co-operative Total = PS2000

3) Taxable income

Calculation

Net income (2) MINUS Personal allowance
PS46,000 MINUS PS8,105 = PS37,895

Includes

a) For all salaries below PS100,000, the PA is PS8,105

b) For all salaries above PS100,000 and below PS116,210 it is calculated:
PS8,105 MINUS (PS110,000 - PS100,000) = PS5,000 2

c) For all salaries above PS116,210 there is no PA

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