HNBS 139: Financial Investment Opportunities
The assignment has been attached, however the order is related to task 2.2 2.2. Calculate personal tax liability in the given scenario: Mr. Y has the following income and outgoings for 2012/ 13 Trading profit £ 38535 Employment income £ 10000 Savings income (amount received) £ 3500 Dividend income (amount received) £ 2000 Qualifying interest (amount paid) £ 1100 Gift aid (amount paid) £ 1660 PAYE of £605 was deducted from employment income. Calculate the amount of income tax payable by Mr. Y, for 2012/13 It is required to implement the right technique of the calculation. Please give me also estimated cost for the whole LO 3 from the assignmentScenario: you have recently joined as a trainee assistant in an investment management firm. The senior
manager of the firm has asked you to prepare a report as what kind of different investment options your firm
provides and what options other bank offers. You have also been asked to suggest and address some
personal tax calculations for some clients.
In your report answer all these following 4 tasks along with a recommendation, conclusions and a self
evaluation about the experience and learning while completion of these 4 tasks. You are working as a financial adviser in an investment management company. One of your clients
is interested to invest money in shares of MTM Plc, the Shares of MTM Plc is giving a return of
20%. The stock exchange as a whole is giving a return of 25% with a risk of 8%, and return on
Govt. securities as a whole is 8%.
Your client also has the choice of the following share investments:
Securities
Expected return
Risk (α)
A 20% 8%
B 25% 6%
C 23% 4%
D 20% 2%
E 22% 2%
Required:
a) You are required to find what the β OF MTM is, and what is systematic risk of MTM Plc?
Learner should use the CAPITAL ASSET PRICING MODEL (CAPM) formula given
below.
E (ri) = Rf + βi [E(rm) – Rf]
βi = αsys / αmkt
b) In addition to MTM share and above listed Securities which investment (or Shares) will
the investor definitely not choose? Learner should assess the attitudes of risks to
different types of risks.
Task 1.2
Give an extensive list of investments available from banks, building societies, insurance companies
and national savings.
Task 1.3
Match and examine the above discussed investment products for different people as per their
suitability.
For M1: Complex problems with more than 1 variables should have been explored in Task 1.1For M2 at
least 3 to 4 citations are clearly present and the bibliography is in the Harvard referencing format.
For M3 the report is well structured, written in impersonal academic language without errors.
6
Task 2: Understand how the UK system of taxation affects investment decisions (LO 2: 2.1, 2.2, 2.3 and
M2, M3 & D1, D2, D3)
Scenario:
Assuming you are a tax consultant, calculate tax in the following conditions and advise the client
accordingly.
2.1. Find capital gain tax in the following conditions:
For 2012/13 Mr. X, has made the following capital gain and capital losses;
A capital gain of £35000
A capital gain of £25000
A capital loss of £8000
A capital loss brought forward of £ 12,000
All these assets were purchased during May 2008 and were sold during September 2010. Calculate the
capital gain tax in 2012/13 assuming his taxable income is £50,000.
2.2. Calculate personal tax liability in the given scenario:
Mr. Y has the following income and outgoings for 2012/13
Trading profit £ 38535
Employment income £ 10000
Savings income (amount received) £ 3500
Dividend income (amount received) £ 2000
Qualifying interest (amount paid) £ 1100
Gift aid (amount paid) £ 1660
PAYE of £605 was deducted from employment income.
Calculate the amount of income tax payable by Mr. Y, for 2012/13
2.3. Mr. ‘X’ is 68 years old and receives property income of 48,000 in tax year 2012/13. His wife
Mrs. ‘X’ is 74 years old and earns no income in 2012/13. Calculate Mr. ‘X’ income tax liability and
recommend what course of action you would advise the couple to reduce tax liability.
2.4. Give a list of tax free investments and its importance for different tax payers.
For M3: Appropriate structure and approach has been used in Task 2.1, 2.2, 2.3
For M2 at least 3 to 4 citations are clearly present and the bibliography is in the Harvard referencing
format
