IT Revision Notes Flashcards
(14 cards)
how do you handle a gift to charity?
deduct gift to charity from NS income
which interest is a tax reducer?
residential mortgage interest at 20%
how do you handle commercial mortgage interest?
it is a deductible expense from property income
rules for remittance basis charge?
resident in 7/9 last tax years = RBC of 30,000
resident in 12/14 last tax years = RBC of 60,000
what do you do with the child benefit charge?
round the % down to the nearest number
how do you handle SMRS for NICs?
45p is used regardless of 10,000 miles limit exceeded or not
for NIC, how is a carried back loss. relieved against profits?
loss carried back is only relieved against trading profits
any loss unrelieved is carried forward
it is not relieved against total income
how is salary sacrifice handled?
it is the higher of:
- benefit
- salary sacrificed
which pension contributions extend the BRB?
personal pension contributions made by the individual
personal pension contributions made by employers do NOT extend the BRB
when is pre-trading expenditure allowable?
if within 7yrs of trade commencement
difference between transition profits and adjustment income/expense?
transitions profits arise when one changes from current year basis to tax year basis
adjustment income/expense arises when one shifts from cash to accrual basis (or vice versa)
how is adjustment income/expense treated?
adjustment income is spread equally across 6yrs
adjustment income is recognised in full in first period
how are transitional profits handled?
they are not included in tax computation
calc IT liability with and without transitional profits
the difference between the two equals the transitional profits tax
add this tax to the IT liability
over what period is transitional profits taxed?
5 years
divide transition profits by 5 and include that amount in the calculations
