Income Tax & NIC Chapter 3&4

Question 1

basic conditions for an individual to be considered a UK resident

Answer 1

• does not meet auto-non residency test
• meets one auto residency test
• has one or more sufficient tie

Question 2

auto-non residency test requirements

Answer 2

• if the person has been in the UK for 16 days or less
• has been in the UK for 26 days and has not been a resident in the previous three tax years
• 91 days and works full time overseas

Question 3

auto UK residency test requirements

Answer 3

• if individual is in the UK for 183 days or more
• individuals only home is in the UK
• individual works full-time in the UK

Question 4

sufficient ties test

Answer 4

1. family - spouse or minor child living in the UK
2. accommodation - has accommodation available in the UK and has been used in the tax year
3. work - does substantive work in the UK
4. days in the UK - has spent more than 90 days in the UK in either or both the previous 2 tax years
5. country - spends more time in the UK than any other country during the tax year
   for an individual not previously resident only first four ties apply

Question 5

conditions for MA to be allowable

Answer 5

neither partner is higher or additional rate payer

Question 6

MA amount

Answer 6

1,260
transferring spouses ITL reduced by 1,260 - recipients reduced by 252

Question 6

when does a child benefit income tax charge arise

Answer 6

an individual or their spouse receiving child support have ANI above 60,000

Question 7

child benefit tax charge when ANI is between 60,000 and 80,000

Answer 7

ANI - 60,000 / 200 * 1%

Question 8

child benefit tax charge when ANI is 80,000 and above

Answer 8

full amount

Question 9

ISA limit

Answer 9

20,000 in either shares or cash

Question 10

allowable deductions from property income

Answer 10

• expense must be incurred wholly and exclusively for the business
• insurance
• agents fees and other expenses
• repairs
• interest on a loan to acquire or improve a let non-residential property

Question 11

RFR formula

Answer 11

allowable deduction = replacement cost -any proceeds from disposal of original item

Question 12

when must accrual basis be used

Answer 12

if and when property income receipts exceed 150,000

Question 13

premium lease formula

Answer 13

premium - (premium * (n-1) * 2%)