Other Taxable Income

Question 1

Discretionary trust income treatment

Answer 1

Must be grossed up by 100/55 and the 45% 5ax credit deducted to find tax due, always treated as non-savigs income

Question 2

Interest in possession trust treatment

Answer 2

Taxed at 20% non-savings/savings gross up 100/80
Taxed at 8.75% for dividends gross up 100/91.25
Tax credits deducted to find tax due

Question 3

Parental settlement rules

Answer 3

Where parent provides funds to a child any income is taxed on the parent. Rules are:
. Funds are settled by a parent
.child is under 18 and unmarried;and
Gross annual income is more than 100

Question 4

Unit trusts

Answer 4

Distribute interest and dividends, both are recieved gross and taxed in the normal way.

Question 5

Company loan stock

Answer 5

Received net of a 20% tax credit and has to be grossed up. The taxed as normal savings income

Question 6

Joint income

Answer 6

Received by spouses or civial partners and split 50/50 unless election is made to be split according to beneficial entitlement

Question 7

Qualifying care receipts

Answer 7

Where the receipts do not exceed the qualifying amount the payments are not subject to tax.
Where it is exceeded the individual will be assessed on the gross amount less any allowable expenses. Individual can elect to be assessed on gross amount less qualifying amount.
Fixed amount 19,360 plus
Weekly amount 405 under 11 and 485 11 and over