B Section C Theory Rote

Question 1

How can loss relief be made (past years)

Answer 1

A claim may be made in either year in isolation, or both years in any order

Question 2

How is loss relief restricted in each year (past years)

Answer 2

To lower of total income or loss

Question 3

How is loss relief restricted in each year (current and future years)

Answer 3

Relief can be used for the whole or loss remaining unrelieved after claims against total income

Question 4

Time limit for claim against total income

Answer 4

First anniversary of the end of the tax year of loss

Question 5

What is the time relief for a terminal loss relief claim?

Answer 5

Within four years of the end of the last tax year of trading

Question 6

How much PA can be transferred to a spouse?

Answer 6

£1260 or 10% of PA

Question 7

Penalities on balancing payment for late payment?

Answer 7

One month late

Six months late

Question 8

If employee is treated as employed in respect of contract? (In relation to PAYE)

Answer 8

Company required to deduct tax under PAYE every time

Question 9

Advantage of furnished holiday lettings (restriction)

Answer 9

No restriction on finance cost

Question 10

Advantage of furnished holiday lettings (allowable)

Answer 10

The cost of furniture purchased for use in furnished holiday letting will be an allowable expense under cash basis

Question 11

Advantage of furnished holiday lettings (relevanmt)

Answer 11

Furnished holiday letting will qualify as relevant earnings for pension tax relief purposes

Question 12

What is done with a P45?

Answer 12

Provided by employer to employee. Then employee gives to new employer

Question 13

What is subject matter in badges of trade?

Answer 13

Some assets commonly held as investments for their intrinsic value

Question 14

What is length of ownership in badges of trade?

Answer 14

If item purchased are sold soon afterwards, this indicates trading transactions

Question 15

What is frequency of transactions in badges of trade?

Answer 15

Multiple transactions will be interpreted as trading transactions where their frequency indicates the carrying on of a trade

Question 16

What is work done in badges of trade?

Answer 16

When work is done to make an asset more marketable. This is likely indicative of trading

Question 17

What is circumstances of realisation in badges of trade?

Answer 17

A forced sale is not likely to be treated as trading

Question 18

What is motive in badges of trade?

Answer 18

Presence of profit is a strong indication that a person is trading

Question 19

Signs of employment (long time)

Answer 19

COntract is for relatively long time

Question 20

Signs of employment (control)

Answer 20

Company exercises control through weekly meetings

Question 21

Signs of employment (significant expenses)

Answer 21

No significant expenses incurred by employee

Question 22

Signs of employment (only working)

Answer 22

Employee is only working for that company

Question 23

Relevant NIC for employed?

Answer 23

Class 1

Question 24

Relevant NIC for self-employed?

Answer 24

Class 2 and 4

Question 25

When can HMRC carry out a compliance check?

Answer 25

Regards the completeness and accuracy of any return (e.g. undeclared income)

Question 26

Which residency test is carried out first?

Answer 26

The automatic non-resident test

Question 27

Which residency test is carried out second?

Answer 27

Automatic UK resident test

Question 28

Which residency test is carried out last?

Answer 28

Substantive tests

Question 29

When is an employer required to submit a full payment submission to HMRC?

Answer 29

Every time a payroll payment is made. The electronic submission should be made on or before the time of the payroll payment

Question 30

What does the final FPS include?

Answer 30

Year-end accumulations for employees

Question 31

What is iXBRL for?

Answer 31

The standardised way accounts and computations may be electronically tagged

Question 32

When is iXBRL a mandatory presentation?

Answer 32

For submissions accompanying the online filing of form CT600 by companies

Question 33

When is iXBRL not a requirement?

Answer 33

For unincorporated businesses

Question 34

What does Form P11D detail?

Answer 34

Expenses and benefits provided

Question 35

When is the time limit for establishing loss relief?

Answer 35

Four years after the end of the tax year of loss

Question 36

When is the time limit for establishing terminal loss relief?

Answer 36

Within four years of the end of the last tax year of trading

Question 37

When a claim against total income is made first?

Answer 37

A trading loss can be set against the chargeable gains of the same and/or preceding tax year

Question 38

When must the trading loss to be set off against chargeable gains be relieved?

Answer 38

After deducting current year capital losses, but before deducting unrelieved capital losses brought forward from earlier tax years and AEA

Question 39

Factors to be considered for loss relief (rate)

Answer 39

Rate of relief

Question 40

Factors to be considered for loss relief (capital allowance)

Answer 40

Amount of loss and ability to adjust this by restricting capital allowance claim

Question 41

Factors to be considered for loss relief (restriction)

Answer 41

Effect of £50,000/25% loss relief restriction

Question 42

Factors to be considered for loss relief (chargeable)

Answer 42

Amount of chargeable gains available for relief

Question 43

Factors to be considered for loss relief (succession)

Answer 43

Current year Prior year (and two preceding years in the case of commencement losses) Expectations of future trading profits.

Question 44

How is a terminal loss relieved?

Answer 44

On a LIFO basis against the trading profits only of the same business for the tax year of cessation and the three tax years preceding that year.

Question 45

How much personal allowanc can be transferred to a spouse?

Answer 45

10% of his personal allowance

Question 46

When profits are withdrawn as dividends (NICs)?

Answer 46

There is no class 1 NIC

Question 47

When is there no corporation tax liability for a new company?

Answer 47

If profits are entirely withdrawn as director's renumeration

Question 48

Another way to calculate employer's Class 1 NIC?

Answer 48

Taxable total profits - director's renumeration

Question 49

Interest relief in FHL vs not FHL?

Answer 49

Not FHL: Is a tax reducer FHL: Is allowable

Question 50

Factors that affect choice of loss relief (timing of relief)

Answer 50

Claim against general income/capital gains in current or preceding years in earlier relief than a carry forward claim against future trading profits

Question 51

Does job-related accomodation have a taxable benefit?

Answer 51

NO

Question 52

How to calculate maximum contribution that qualifies for tax relief?

Answer 52

Trading profit - pension contribution

Question 53

What is iXBRL used for?

Answer 53

The standard way that accounts and computations are electronically tagged

Question 54

When is iXBRL mandatory?

Answer 54

Submissions accompanying the online filing of form CT600 by companies

Question 55

What does form P11D contain?

Answer 55

Expenses and benefits provided

Question 56

Is form P60 and P11D provided to employees?

Answer 56

YES

Question 57

How is child benefit income tax charge collected?

Answer 57

Through self-assessment system

Question 58

If a person makes lifetime gifts even when such gifts are made within seven years of death. Advantage (taper relief)

Answer 58

Taper relief will reduce the amount of IHT payable after 3 years

Question 59

If a person makes lifetime gifts even when such gifts are made within seven years of death. Advantage (fixed)

Answer 59

Value of PETs and CLTs are fixed at the time they are made

Question 60

When is iXBRL mandatory?

Answer 60

For submissions accompanying the online filing of form CT600 by companies

Question 61

Maximum contribution which qualifies for tax relief in pensions calculation?

Answer 61

Relevant earnings - contributions already made

Question 62

What is an example of a no gain/no loss disposal?

Answer 62

DIsposal of a chargeable asset between a husband and wife