Raising Individual Financial Awareness

Raising Individual Financial Awareness ACFI4006 Semester 1 2019-20 Coursework 3 – Individual Assignment – total 50% of the module. PART A Answer questions 1 and…

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.]

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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