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TC > Income Tax > Flashcards

Income Tax Flashcards

1
Q

Personal representative

A

individual whom another has trusted to manage their property and money. When a person dies, executor or administrator will settle IHT affairs of the deceased

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2
Q

Chargeable/exempt
employment income

A

Chargeable

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3
Q

Chargeable/exempt
Trading income

A

Chargeable
if less than £1000 may be exempt

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4
Q

Chargeable/exempt
Property income

A

Chargeable
If less than £1000 may be exempt

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5
Q

Chargeable/exempt
savings income from loan interest/bank /building society

A

Chargeable

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6
Q

Chargeable/exempt
Dividend income

A

Chargeable

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7
Q

Chargeable/exempt
Miscellaneous income

A

Chargeable

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8
Q

Chargeable/exempt
Interest on national savings certificate

A

Exempt

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9
Q

Chargeable/exempt
ISA income

A

Exempt

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10
Q

Chargeable/exempt
Betting, lottery and premium bond income

A

Exempt

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11
Q

Chargeable/exempt
Social security benefits e.g. housing and child benefit

A

Exempt (rules)

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12
Q

Chargeable/exempt
first £7,500 of letting under rent a room

A

Exempt

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13
Q

Chargeable/exempt
Scholarships

A

Exempt

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14
Q

Chargeable/exempt
Income tax repayment interest

A

Exempt

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15
Q

Chargeable/exempt
Universal credit

A

exempt

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16
Q

Chargeable/exempt
apprenticeship bursaries paid to care leavers

A

exempt

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17
Q

Chargeable/exempt
payments made under compensation schemes (windrush)

A

Exempt

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18
Q

Income tax relief on qualifying interest payments and trading losses in some cases is

A

Higher of £50,000
25% of adjusted total income

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19
Q

Adjusted total income

A

Total income + payroll giving - gross personal pension contributions

20
Q

Adjusted net income

A

net income - deduct grossed up amounts of gifts aid and personal pension contributions

21
Q

Tax year runs from

A

6 aPRIL - 5 aPRIL

22
Q

Child benefit for eldest/only child

A

£1134

23
Q

Child benefit for second and each other child

A

£751

24
Q

Child benefit income tax charge if tax payer/partner has adjusted net income of over £50,000

A

1% for each £100 between £50k and £60k.
Full amount if income over £60,000

25
Q

If both partners earn more than £50k, who is liable for the tax charge in relation to the child benefit

A

One with higher income

26
Q

What are devolved taxes

A

Devolution gives Scotland, Wales and NI forms of self government including ability to set certain tax rates separately

27
Q

Election to carry back gift aid 1 year must be made

A

later of
date return for previous year filed
31 January following the end of previous tax year

28
Q

Payroll giving scheme

A

Donations made to charity under approved payroll giving scheme giving tax relief on the amount paid to charity

29
Q

Amount of deduction for gift of assets to charity

A

MV of shares/securities at date of disposal _ incidental costs of disposal (broker fees) - consideration given in return for disposing - value of any other benefits received by the donor, or connected person

30
Q

Qualifying shares or securities
Shares / securities listed on / dealt with on (inc AIM) recognised stock exchange

A

Qualifying

31
Q

Qualifying shares or securities
Units in authorised unit trust

A

Qualifying

32
Q

Qualifying shares or securities
Shares in open-ended investment company

A

Qualifying

33
Q

Qualifying shares or securities
Holdings in certain foreign collective investment schemes

A

Qualfiying

34
Q

Deduction for land/buildings given to chairty

A

= MV freehold/leasehold land or buildings given to a charity

35
Q

Qualifying interest payments
To buy plant or machinery for use in a partnership

A

Interest Qualifies for three years from end of tax year in which loan was taken out
if part private - only proportion eligible

36
Q

Qualifying interest payments
to buy plant or machinery to use in employment purposes

A

Interest Qualifies for three years after the end of the tax year the loan was taken out.
If part use private - proportion eligible

37
Q

Qualifying interest payments
to buy interest in close company (other than close holding company) /lending money to company for purpose of business

A

Qualifying if
borrower holds shares AND works full time as manager or director
OR have material interest in the close company (5%+ shares)

38
Q

Close Company defintion

A

UK Resident company controlled by shareholder-directors
OR
controlled by 5 or fewer shareholders

39
Q

Qualifying interest payments
buying shares in employee0controlled company

A

If company Is unquoted trading company resident in UK with at least 50% voting shares held by employees

40
Q

Qualifying interest payments
to invest in partnership / contribute capital/make loan

A

Qualifying gif borrower is partner (not limited liability partner)
relief ceases when stop being parter

41
Q

Qualifying interest payment
To buy shares in / lend money for co operative

A

Qualifying if borrower works for greater part of time in co op or sub

42
Q

Qualifying interest payment
To pay IHT

A

Paid by personal representative qualifies for 12 months

43
Q

Qualifying interest payment
to replace loans to buy interest in close company/employee controlled/invest in partnership/buyshares or Land in co op or pay IHT

A

Qualifying

44
Q

Where interest is allowable the deduction is …

A

the amount payable on accruals basis, not the interest paid

45
Q

Income on jointly owned property is split

A

50/50 unless declaration made to HMRC - notice must be sent to HMRC within 60 days of the declaration and this can’t be made in respect of doing bank/building society account

46
Q

Dividends from shares in a family company jointly owned by spouses/civil partners will be taxed

A

According to actual ownership

47
Q

Marriage allowance

A

1260
If both are basic rate tax payer or transferor has no tax liability
Recipient benefits from reduction in income tax liability at basic rate

TC (18 decks)

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