Investment Taxation Flashcards
(8 cards)
What is the Tax treatment of rental income?
Rental income treated as investment income (Not “earned income).
Unless substantial services provided (house keeping etc) e.g. is a Business
How is Rent-a-room relief Taxed?
£7,500 gross is tax free. Any above attracts taxation (income).
No deductions for expenses etc allowed.
1 per household.
Qualifies for Furnished holiday lettings?
(Quick Fire x7)
- Located in UK or EEA
- Furnished
- Let on commercial basis
- Available for 210 days per tax year
- Let for 105 days per tax year
- May be let for continuous periods of more than 31 days, but not more than 155 days in a tax year
- Does not need to be in holiday resort
Tax advantages of Furnished holiday letting?
Treated as Trading Income e.g. allowed for Pensions / Losses
CGT Rollover and BADR available as treated as a business
How is Woodland treated in tax?
Profits exempt from income tax
IHT postponed if used for timber etc
Commercially managed woodlands exempt from CGT
ISA eligibility and conditions?
- Individual contracts only (no joint ISAs)
- UK resident or non-UK resident Crown employees working overseas (or their spouse/ civil partner).
- On becoming non-resident, no further contributions can be made, but the tax benefits can be kept.
- Can only invest in one provider per ISA type per tax-year. Though can set up different ISA types with different provider.
How are Offshore funds treated for in tax?
- Taxed on encashment only.
- Gain is calculated on CGT principles - no CGT Annual Allowance
- Tax is charged at income tax rates
- PSA and DA do not apply.
- Divs received by offshore funds may be subject to non-reclaimable withholding tax.
- Some countries levy a small tax charge on offshore funds.
What are Top-Slicing Relief basic steps?
Calculate Gain
Gain / Policy Years
Income + Gain compare to Tax Bracket
Apply correct tax to withdrawal
