Ct1 Chp 12 Example 12.17

Discussion in 'CT1' started by Ashwini, Sep 14, 2017.

  1. Ashwini

    Ashwini Member

    Hello,
    Can anyone tell me why the net income each year is 4.5% of purchase price? And how is it calculated?
     

    Attached Files:

  2. Ellen

    Ellen Member

    The gross interest received on the loan is 1000*6%=60 then, since income tax of 40% is payable on that income the net income is 60(1-0.4)=36 which is 4.5% of £800. {36/800=0.045}
     
    Ashwini and John Lee like this.
  3. Ashwini

    Ashwini Member

    Got it. Thank you!!
     

Share This Page