Question Tag: Interest Income

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TAX – Nov 2015 – L2 – Q5b – Companies Income Tax (CIT)

This question requires the computation of Adebola Nigeria Limited's tax liabilities and withholding tax payable for 2013 and 2014.

Adebola Nigeria Limited has been trading for many years. The company makes up its accounts to 31 December annually. The extracts from its Statement of Comprehensive Income for the years ended 31 December 2013 and 2014 (as adjusted for tax purposes) are as follows:

Year ended 31 December 2014 (₦) 2013 (₦)
Profit for the year 14,000,000 10,000,000
Bank interest received (gross) 2,400,000 1,600,000
Debenture interest received (gross) 800,000 800,000
Dividend received from Adesemowo Ltd. (Net) 720,000 720,000
Dividend paid to shareholders (gross) 6,000,000 4,000,000

Required:
i. Compute the company’s tax liabilities for the relevant years of assessment. Ignore capital allowances. (5 Marks)
ii. Determine the net withholding tax payable or receivable by Adebola Nigeria Limited, arising from dividends paid and received by it. (4 Marks)

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TAX – May 2018 – L2 – Q2 – Tax Planning and Management

Compute assessable incomes from various investments for Tosin Oguntona.

Tosin Oguntona was an employee of a Federal Government parastatal in Nigeria. While in service, he invested his earnings in various investments, deriving incomes from them along with his monthly pension. The following details were provided:

Assessment Years 2013 2014
Dividend Income
Dividend from Nigerian companies N1,200,000 N1,500,000
Dividend from abroad paid into a domiciliary account $4,000 $4,500
Rental Income
Rent from buildings in Ibadan N630,000 N720,000
Rent from buildings in Abuja N1,500,000 N1,740,000
Rent from buildings in Oyo N420,000 N520,000
Rent from buildings in Lagos N750,000 N780,000
Expenses
Repairs and maintenance N90,000 N96,000
Personal income tax paid N240,000 N280,000
Water rate N40,000 N50,000
Depreciation on building N620,000 N700,000
Agent’s commission N96,000 N108,000
Insurance N120,000 N150,000
Depreciation on plant N150,000 N162,000
Interest Incomes
Interest received from bank N360,000 N420,000
Interest on domiciliary account $1,200 $1,500

Other information:

  1. Capital allowances agreed with the revenue authority for 2013 and 2014 assessment years were N150,000 and N180,000 respectively.
  2. Insurance on properties included N24,000 and N30,000 for 2013 and 2014, respectively, for his private residence.
  3. Pension of N80,000 per month was received.
  4. Exchange rate: N160 to $1.

Required:
Compute the Assessable Incomes of Tosin Oguntona for 2013 and 2014 Assessment Years.

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TAX – Nov 2015 – L2 – Q5b – Companies Income Tax (CIT)

This question requires the computation of Adebola Nigeria Limited's tax liabilities and withholding tax payable for 2013 and 2014.

Adebola Nigeria Limited has been trading for many years. The company makes up its accounts to 31 December annually. The extracts from its Statement of Comprehensive Income for the years ended 31 December 2013 and 2014 (as adjusted for tax purposes) are as follows:

Year ended 31 December 2014 (₦) 2013 (₦)
Profit for the year 14,000,000 10,000,000
Bank interest received (gross) 2,400,000 1,600,000
Debenture interest received (gross) 800,000 800,000
Dividend received from Adesemowo Ltd. (Net) 720,000 720,000
Dividend paid to shareholders (gross) 6,000,000 4,000,000

Required:
i. Compute the company’s tax liabilities for the relevant years of assessment. Ignore capital allowances. (5 Marks)
ii. Determine the net withholding tax payable or receivable by Adebola Nigeria Limited, arising from dividends paid and received by it. (4 Marks)

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TAX – May 2018 – L2 – Q2 – Tax Planning and Management

Compute assessable incomes from various investments for Tosin Oguntona.

Tosin Oguntona was an employee of a Federal Government parastatal in Nigeria. While in service, he invested his earnings in various investments, deriving incomes from them along with his monthly pension. The following details were provided:

Assessment Years 2013 2014
Dividend Income
Dividend from Nigerian companies N1,200,000 N1,500,000
Dividend from abroad paid into a domiciliary account $4,000 $4,500
Rental Income
Rent from buildings in Ibadan N630,000 N720,000
Rent from buildings in Abuja N1,500,000 N1,740,000
Rent from buildings in Oyo N420,000 N520,000
Rent from buildings in Lagos N750,000 N780,000
Expenses
Repairs and maintenance N90,000 N96,000
Personal income tax paid N240,000 N280,000
Water rate N40,000 N50,000
Depreciation on building N620,000 N700,000
Agent’s commission N96,000 N108,000
Insurance N120,000 N150,000
Depreciation on plant N150,000 N162,000
Interest Incomes
Interest received from bank N360,000 N420,000
Interest on domiciliary account $1,200 $1,500

Other information:

  1. Capital allowances agreed with the revenue authority for 2013 and 2014 assessment years were N150,000 and N180,000 respectively.
  2. Insurance on properties included N24,000 and N30,000 for 2013 and 2014, respectively, for his private residence.
  3. Pension of N80,000 per month was received.
  4. Exchange rate: N160 to $1.

Required:
Compute the Assessable Incomes of Tosin Oguntona for 2013 and 2014 Assessment Years.

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