Business Planning: Taxation Flashcards
(22 cards)
What shareholding is required for a gains group?
75%
What shareholding is required for a VAT group?
50%
What shareholding is required for consortia?
5% and above but less than 75%
What is the maximum relief for consortia?
Lower of:
- Consortium member percentage shareholding
- Consortium members TTP
What is the maximum relief for group relief?
Maximum of:
- £5million AND
- 50% of the excess profits over £5million
What’s is the shareholding required for a chargeable gains group?
75% direct link between each company and 50% indirect links
What is the de-grouping charge, when does it apply?
If:
- A company leaves a gains group within 6 years of an asset being transferred on NGNL basis
- It still owns the asset at the time of exiting the group
What are the three types of tax-advantaged share schemes, who are they for?
1 - CSOP - Employees large companies
2 - EMI - Employees small companies
3 - SAYE - Employees
Benefits of the CSOP share options scheme?
- No income tax or NIC on the grant of exercise of the shares only when sold
- Can be up to a value of 60k worth per employee
- Can be exercised 3-10 years after grant.
Benefits of the EMI share option scheme?
- No income tax or NIC on the grant of exercise of the shares only when sold
- Can be up to a value of 60k worth per employee
- Can be exercised up to 10 years after grant.
- Ownership period for BADR starts upon grant giving you 10% tax rate.
What are the income tax rates for non-savings income and personal allowance?
AR - 45%
HR - 40%
BR - 20%
PA - £12570
What are the income tax rates for savings income and any exempt amounts?
AR - 45%
HR - 40%
BR - 20%
First £500 @ 0% for HR taxpayers
First £1000 @ 0% for BR taxpayers
What are the income tax rates for dividend income and any exempt amounts?
AR - 39.35%
HR - 33.75%
BR - 8.75%
First £500 @ 0%
What are the capital gains tax rates?
Normal gains BR - 10%
Normal gains HR - 20%
Residential gains BR - 18%
Residential gains HR - 24%
AEA - 3000!!!!
A company is deemed to commence winding up at the earlier of?
1 - members passing a resolution to wind up
2 - liquidator being appointed.
What is the best way to wind up (order of winding up)?
Commence winding up and then cease to trade so trading losses in the period up to cessation of trade can be offset against gains/losses on disposal of assets through the winding up process?
Why cant you offset trading losses in the final accounting period to cessation against gains/losses upon winding up?
Ceasing to trade before winding up commences often occurs on the same say but will trigger the end of an accounting period and therefore no trading losses will be allowed to be brought forward to the accounting period where gains and losses are made on wind up.
What is striking off?
Another form of liquidation but all shareholders will get the dividend treatment unless company is intending to pay debts or distributions are less then 25,000
Why would a company buy back shares?
- Could be an issue between the shareholders
- The other members that are staying may not way a randomly appointed new member
- They may see it as the best use of cash to reduce shares.
What are the two treatments for share buy backs and what is preferred?
Capital & Dividend.
Capital is preferred because you could get IR or BADR.
Dividend treatment is part of the income tax comp and therefore will be taxed at higher rates.
What is the VAT treatment of new and old properties and what classifies new?
Opting to tax makes the sale standard rated and requires you to charge VAT on services or rent from the building.
Lasts for 20 years and is irreversible.
