Chapter One - Income Tax Flashcards Preview

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Flashcards in Chapter One - Income Tax Deck (7)
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What do you need to do to income from a purchase life annuity before adding it to an individuals total income?

Gross it up, and then take the tax relief away from the total tax liability at the end of the calculation


What deductions can you have for interest payments?

Can deduct the annual interest as long as the interesr does not exceed £50,000 or 25% of the individual's adjusted net income


What deduction can be used for mortgage interest?

100% of the mortgage interest costs given at a basic rate tax deduction which is reduced from tax bill


What is the property income and trading allowances?

Any income (before expenses) under £1,000 is tax free


What is the marriage allowance?

Someone with no or little income can transfer their personal allowance to their basic rate taxpayer spouse which is a £250 reduction from tax bill


What is the marrigage couple allowance?

Any couples who are married and born before 1935 are give a tax reducer of 10% of the £9,075 allowance.
This allowance is reduced by £1, for every £2 of income over £30,200, floor is £3,510.


What is the high income child benefit charge?

There is a charge when income exceeds £50,000
Income - £50,000 / £100
This is then multiplied by 1% of the total child benefit