CTA IND 1-10 Flashcards
(16 cards)
What are examples of exempt income ? (x6)
- Interest from NS&I certificates
- Premium bond winnings
- Income from betting and lotteries
- Benefits
- Income from ISAs
- Maintenance payments
How is taxable income calculated?
All sources of income - deductible payments - personal allowance
What are the main rate bandings for Income tax?
37,700 at 20%
87,440 at 40%
so 125,140
Rest at 45%
What is the savings allowance amount?
No HR income = 1,000
HR but no AR = 500
AR = none
Where taxable non-savings income is less than £5,000, interest income is taxed at the starting rate of 0% until taxable income reaches ….
£5,000
When are benefits received by a participator in a close company treated as dividends?
When they are NOT employees or directors
MCA of £11,080 if one spouse born pre 6 april 1935.
Restricted if net income over £37,000.
How do we restrict and what is the minimum MCA?
Restrict:
1/2 x (adjusted net income - 37,000)
Minimum = £4,280
What are 4 examples of qualifying interest (deductible payment)
- Loan by employee to buy P&M (not car)
- Loan to buy shares in close company / provide funds to close company
- Loan to buy shares in employee-owned company
- Loan to buy into partnership
How to extend Higher and AR limit for gift aid?
BR limit
Add: Gross charitable payment ie (800 x 100/80)
Add to limit = 38,700
Definition of a Scottish taxpayer?
- Close connection to Scotland or
- Spend more days in Scotland than elsewhere in UK
Close connection=
1. Single place of residence in Scotland or
2. Spend at least as much of year in Scotland than any other part of UK
For Income Tax self assessment, what is the deadline to notify chargeability?
Six months from end of tax year = 5 October
What is the time limit for submitting paper tax return?
LATER OF :
- 31 October following tax year or
- Three months after notice to file was issued (2 months if HMRC calculate tax)
How long can HMRC and the Taxpayer amend errors in a return?
HMRC = within nine months of receiving return
Taxpayer = within 12 months of normal filing date
What is a simple assessment by HMRC?
HMRC can make an assessment of an individual’s tax liability without the individual having to file a tax return.
It will show the amount payable
Individual can query within 60 days
What are two reasons that payments on account would not be required?
- Tax due for previous year is less than £1,000 or
- More than 80% tax liability is collected at source
Tax paid late attracts interest…..
From the due date to the date of payment
