SGS 3 (Individual Tax)

Question 1

For step two, what is one available relief?

Answer 1

Interest on qualifying loans:
buy interest in partnership
Contribute capital / make loan to partnership 
Loans to buy shares in close company 
Loan to invest in a coop.

Question 2

Formula for personal allowance if NET income is over £100,000?

Answer 2

11,850 - (NET income - 100,000) / 2

Question 3

How is non-savings income calculated?

Answer 3

TAXABLE - savings - dividend

Question 4

What are employee benefits such as health insurance. company cars and interest free loans subject to?

Answer 4

Income tax, but not deduction under PAYE. Must be included in total income unless they are below £50.

Question 5

What is relevant in determining what rate taxpayer you are?

Answer 5

TAXABLE income.

Question 6

Someone who’s taxable income is £30,000.
Make a chargeable gain of £6,300
What are they taxed at?

Answer 6

£4,500 at 10%

£1,800 at 20%

Question 7

Describe rollover relief?

Answer 7

Postpones CGT liability until sale of an asset realised by rolling over the gain onto a replacement asset.

Acquisition cost of replacement asset is reduced by amount of GAIN being rolled over.

AE cannot reduce the gain rolled over.

Question 8

When does ER apply?

Answer 8

selling shares in a trading company (still doing business)

person disposing owns at least 5% ordinary voting shares and involved in company’s running as officer or employee

For one year prior to disposal

Not exceeded lifetime limit.

Question 9

Describe hold-over relief.

Answer 9

Individual gives away a BUSINESS asset (but not shares quoted on stock exchange)

Donor has no CGT liability.

Donee’s acquisition cost reduced by amount of donor’s deemed gain.
Both donor and donee must jointly elect to claim hold-over relief.

Question 10

What is assets can benefit from rollover relief?

Answer 10

‘qualifying’ = land, buildings, fixed plant and machinery and goodwill - must be qualifying but need not be same type.