Solutions Manual for Taxation Finance Acts 2025, 31st Edition (Melville, 2025) | All Chapters 2–32 Covered

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TABLE OF CONTENTS
Solutions Manual: Taxation Finance Acts 2025, 31st Edition
Author: Alan Melville



Chapter 2. Introduction to income tax (Solutions 2.5, 2.6)
Chapter 3. Personal allowances (Solutions 3.8, 3.9)
Chapter 4. Payments and gifts eligible for tax relief (Solutions 4.8, 4.9)
Chapter 5. Income from property (Solutions 5.6, 5.7)
Chapter 6. Income from savings and investments (Solution 6.6)
Chapter 7. Income from employment (1) (Solutions 7.5, 7.6)
Chapter 8. Income from employment (2) (Solutions 8.4, 8.5)
Chapter 9. Income from self-employment: Computation of income (Solutions 9.7, 9.8, 9.9)
Chapter 10. Income from self-employment: Allocating profits to tax years (Solutions 10.7,
10.8, 10.9, 10.10, 10.11)
Chapter 11. Income from self-employment: Capital allowances (Solutions 11.4, 11.5)
Chapter 12. Income from self-employment: Trading losses (Solutions 12.5, 12.6)
Chapter 13. Income from self-employment: Partnerships (Solution 13.5)
Chapter 14. Pension contributions (Solutions 14.6, 14.7)
Chapter 15. Payment of income tax, interest and penalties (Solution 15.4)
Chapter 16. National Insurance contributions (Solutions 16.4, 16.5)
Review questions (Set A) (Solutions A6, A7, A8, A9, A10)
Chapter 17. Introduction to capital gains tax (Solutions 17.8, 17.9, 17.10)
Chapter 18. Computation of gains and losses (Solutions 18.6, 18.7)
Chapter 19. Chattels and wasting assets (Solutions 19.8, 19.9, 19.10)
Chapter 20. Shares and securities (Solutions 20.8, 20.9, 20.10, 20.11)
Chapter 21. Principal private residence (Solution 21.5)
Chapter 22. CGT reliefs (Solutions 22.5, 22.6, 22.7, 22.8)
Review questions (Set B) (Solutions B5, B6, B7, B8, B9)
Chapter 23. Introduction to corporation tax (Solutions 23.7, 23.8)
Chapter 24. Corporate chargeable gains (Solution 24.3)
Chapter 25. Computation and payment of the corporation tax liability (Solutions 25.7, 25.8,
25.9, 25.10)
Chapter 26. Corporation tax losses (Solution 26.6)



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Chapter 27. Close companies and investment companies (Solutions 27.4, 27.5)
Chapter 28. Groups of companies and reconstructions
Chapter 29. Value added tax (1) (Solutions 29.6, 29.7, 29.8)
Chapter 30. Value added tax (2) (Solutions 30.4, 30.5)
Chapter 31. Inheritance tax (Solutions 31.6, 31.7)
Chapter 32. Overseas aspects of taxation (Solutions 32.7, 32.8)




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Melville: Taxation: Finance Act 2025, Instructor's Manual, 31st ed.



Chapter 2
Introduction to income tax
2.5
Total Non-savings Savings Dividends
£ £ £ £
Employment income 17,055 17,055
Gilt interest £1,360  100/80 1,700 1,700
Dividends 14,060 14,060
——— ——— ——— ———
Total income 32,815 17,055 1,700 14,060
Less: Personal allowance 12,570 12,570
——— ——— ——— ———
Taxable income 20,245 4,485 1,700 14,060
——— ——— ——— ———
Income tax due
Non-savings income : Basic rate 4,485 @ 20% 897.00
Savings income : Starting rate 515 @ 0% 0.00
: Nil rate 1,000 @ 0% 0.00
: Basic rate 185 @ 20% 37.00
Dividend income : Nil rate 500 @ 0% 0.00
: Ordinary rate 13,560 @ 8.75% 1,186.50
———
20,245
——— ———
Tax liability 2,120.50
Less: Tax deducted at source (£1,700 – £1,360) 340.00
———
Tax payable 1,780.50
———
Note that the premium bond prize is exempt from income tax. For a Scottish taxpayer, the first £2,827 of
non-savings income would be taxed at 19%, reducing the tax liability by £28.27.


2.6
Total Non-savings Dividends
£ £ £
Business profits 26,930 26,930
Income from property 4,250 4,250
Dividends 123,960 123,960
——— ——— ———
Total income 155,140 31,180 123,960
Less: Personal allowance 0 0
——— ——— ———
Taxable income 155,140 31,180 123,960
——— ——— ———
Income tax due
Non-savings income : Basic rate 31,180 @ 20% 6,236.00
Dividend income : Nil rate 500 @ 0% 0.00
: Ordinary rate 6,020 @ 8.75% 526.75
: Upper rate 87,440 @ 33.75% 29,511.00
: Additional rate 30,000 @ 39.35% 11,805.00
———
155,140
——— ————
Tax liability 48,078.75
————
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