Unit 12 Session 7

8/3/2019 Unit 12 Session 7

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UNIT 12

TAXATIONSession 7


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Topics Review of Last session

Test of baseline knowledge

Bases of assessment

Adjustments of profits and losses

Disallowed expenses

Tax Losses

Capital expenses and allowances

Tax FormsGo TopGo Top


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Review of Last session


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Test of baseline knowledgeTest of baseline knowledge


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Bases of assessment

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Requisites for income to be taxable

There must be gain or profit

Gain must be received or realized

Gain must not be excluded or exempt by law Gain need not be in cash


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Adjustments of profits andlosses

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Adjustments

Returns of Sale

Recovery of losses/ expenses


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Disallowed expenses

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No deduction shall in any case be

allowed in respect to(1) Personal, living or family expenses;(2) Any amount paid out for new buildings or for permanent

improvements, or betterments made to increase the value of

any property or estate;(3) Any amount expended in restoring property or in making

good the exhaustion thereof for which an allowance is or has

been made; or

(4) Premiums paid on any life insurance policy covering the life of

any officer or employee, or of any person financially

interested in any trade or business carried on by the taxpayer,

individual or corporate, when the taxpayer is directly or

indirectly a beneficiary under such policy.


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No deductions shall in any case be

allowed in respect of losses:(1) Between members of a family(2) An individual and corporation more than fifty percent (50%)

in value of the outstanding stock of which is owned, directly

or indirectly, by or for such individual; or(3) Two corporations more than fifty percent (50%) in value of

the outstanding stock of which is owned, directly or indirectly

(4) Between the grantor and a fiduciary of any trust; or

(5) Between the fiduciary of and the fiduciary of a trust and thefiduciary

(6) Between a fiduciary of a trust and beneficiary of such trust.


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Tax Losses

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Losses

Where total expenses are more than total income

for taxation purposes.

A business can incur a loss for tax purposes but

a profit for accounting purposes


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Capital expenses and

allowances


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Capital Expenditure

Payments by a business for fixed assets, like

buildings and equipment.

Capital expenses are not used for ordinaryday-to-day operating expenses of a business,

like rent, utilities, and insurance.

Another way to consider capital expenses is

that they are used to buy assets that have a

useful life of more than one year.


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Tax Forms


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Individual Tax Forms


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Tax Forms


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Tax Forms


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Tax Forms


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Topics for Research

Bases of assessment Corporate Tax

Scope of Corporate Tax

Accounting periods

Chargeable profits

Payment Dates

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Required

Complete relevant

documentation and returns

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Documents

Unit 12 Session 7