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Flashcards in Af1 Deck (46)
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1

What are the sufficient ties 5

- spouse, civil or minor child
- working 40 days or more in UK
- in UK more than 90 days or more in this or prev tax year
- has accommodation not let out
- spending more time in UK than any other country

2

Furnished holiday let

- income can count as relevant for pension
- available 210 days
- let 105 days no longer than 31 single
- such periods no longer than 155 days
- uk
- entrepreneurs relief at 10%
- income tax relief on borrowing
- business relief 100% if she dies

3

Married but intestate

- spouse receives chattels
- spouse receives £270k absolutely
- then half remainder
- then to children

4

Discretionary trust income tax on beneficiary

- income carries 45% tax credit
- based on personal rate
- trustees liable for difference in tax pool
- if under 18 subject to parental settlement rules

5

Order of bankrupcy

- Secured creditors
- expenses in bankruptcy
- preferential debts such as pension payments or remuneration employees
- creditors with floating charge , debentures
- unsecured debts
- interest on debts
- debts to spouse

6

VCT eligibility and qualifying investment

- closed ended company
- listed on any stock exchange in EEA
- income from shares / securities
- 80% in unlisted trading companies
- not more than 15% in one company
- at least 10% of any investment must be in ordi ary shares
- at least 70% of investments must be in ordinary shates
- must not invest in something with assets of 15mi ll or more before or 16 after
- max can be raised from qualifying conpany is 5mil / 10mil
- company less than 7 years old / 10 years from turnover exceeding 200k

7

Bankruptcy circumstances

- owe at least £5k to one or group
- creditors prove debtor unable to pay / complied with stat demand CCJ - 3 weeks
- apply online
- official receiver takes control of assets
- OR investigates and reports to creditors and decided to arrange a meeting 10 % to vote for insolvency prac as trustee TIB
- No meeting OR is trustee
- 21 days to notify inheritance/42 days to be paid from executors

8

Duties of court of protection

- decide if a person has capacity to manage own affairs
- makes declarations re financial / welfare matters
- appoint / remove deputies atyorneys
- hearing cases re LPA or EPA

9

Domicile conditions

- take fathers or mother if illegitimate children
- uk domicile if resident fir 15 out of 20 tax years
- can elect to be treated as UK for IHT

10

Quick succession relief

(Tax paid x net)/ gross x %

11

REITS

- income paid net of 20% tax in exempt
- profits from ring fenced property business is exempt for corporation tax
- profits for remainder is taxed
- gains are subject to CGT

- at least 75% comes from property letting
- 90% profits paid out to investors within 12 months
- interest must be covers by 125% of rental income
- must be uk tax resident company
- listed on stock exchange inc AIM
- closed ended company
- not a close company

12

How HMRC calculate tax code

- employer supplies HMRC with info
- base personal allowance over 2/3 years
- assume earnings continue
- if no p allowance K tax code used to add to taxable income
- P11D

13

State pension

- Based on NI contributions
- min 10 years max 35
- 1/35th of state per year
- pay class 3 to top up
- claim NI credits
- defer at least 9 weeks
- 1% increase for every 9 weeks
- child benefit till child age 12 would count as years

14

Discretion trust tax on trustees

£1000 standard rate
7.5 % / 20 %
38.1% / 45%
CGT £6,000
Expenses can be relieved
Must make sure enough in tax pool
30% of trust charge 20% = 6% 10 year
Exit x/40 3 month periods x effective rate
Stamp duty add 3%
Cost are grossed up

15

Chattels exemption

CGT
£6,000 based on proceeds
Cannot exceed 5/3 of over 6k
Over 15k cant use

16

Bankrupcy - home

- interest and right to sell pass to TIB
- TIB obtains order for sale
- minor children must wait 1 year
- has 3 years to deal or reverts to bankrupt
- trustee must - realise interest, order of sale, charging order, deal with bankrupt

17

SIP or SAYE

Sip
Free of nic and taken from gross
May offer free shares
Must hold for 5 years
Dividend income free of tax if new shares
Cgt on disposal or not if sold imm

Saye
Net pay
No dividends
Tax free bonus
Cgt if option is taken unless goes into isa within 90 days

18

Deed of variation

- over 18 sound of mind
- must refer to intestacy or will
- signed by current beneficiary
- executed within 2 years of death
- mist state it is ti effect iht as deceased
- no consideration for monies worth

19

Conditions of lasting power of attorney

- both need to be over 18
- not bankrupt
- mental capacity
- on prescribed form
- must state info has been read and understand duties
- no fraud / pressure
- witnesses independently
- reg with court if protection / office of public guardian
- fee £82
- inform relevant people

20

VAT

- notify hmrc if taxabke supplies over 85k in rolling 12 months
within 30bdays of the end of the month
- if expected to be above within next 30 days must notify before end
- could register anyway
- input can be offset against output
-digital records

21

Conditions for entrepreneurs relief 5

- must have active role
- must have owned business for at least 2 years
- must have at least 5% voting rights
- must be trading company
- can qualify if sold within 3 years of cease trading

22

Holdover relief

- transfers subject to iht qualify
- acquisition cost reduced by held over gain
- must both claim it
- donee must be uk resident 6 years
- not to company
- available on trading assets
- shares not quoted on stock exchange

23

EIS

- 30% tax relief
- £1 / £2 mill
- can be carried back 1 Yr
- exempt after 3 years CGT
- dividends taxable
- losses can be relieved
- Initially not connected but can be director after
- no prearranged exit
- gross assets of 15mill / 16mill
- less than 7 years unless 50% ann turnover and intends to enter new product market
- uk
- unlisted . AIM included
- 250/ 500 employees
- raised no more than 5 mill / 10 mill
- can't exceed 30% shareholding

24

SEED

- 50 % income tax relief
- 50% up to 100k
- can be paid director if under 30% share
- trading less than 2 years
- 25 max employees
- 50% CGT excemption

25

Tapered annual allowance- pension

- threshold exceeds 110k / 200
- adjusted income exceeds 150k / 240
- minimum 10k / 4K from 40k
- reduces by 2 for 1 that exceeds 150k

26

IHT

- must be paid by end of 6 month
- can be paid 10% per year if house lived in
- 36% if over 10% of remaining NET estate (exc residence nil band)
- transfer claimed within 2 years from end of mknth of 2nd death or 3 months from when personal representatives take over
- not affected by new relationships

27

Car allowance

Bonus

Include accessories

Bonus not included in pension

28

Hmrc fines

£100 penalty
If more than 3 months £10 daily up to 90
Further £300 or 5% at 6 months later then 12

29

Residency

Not

Less than 16 day or 46 if not res 3 tax years
Work elsewhere, UK less than 91 days and work less 31 days uk

Yes
183 days
Only home on uk and lived in it for 91 days in total and 30 of these in tax year
Full time work in uk

30

Exemption / relief on property sale

Primary residence relief
Lower of 40,000
9 months ownership