Tax Flashcards
(40 cards)
Who are the chargeable persons or entities for UK income tax?
Employees, sole traders, partners, shareholders, lenders and debenture holders.
Between April 6 and April 5, what is the deadline for filing an online income tax return?
31 January following the end of the tax year.
Between April 6 and April 5, what is the deadline for filing a paper income tax return?
31 October following the end of the tax year.
List the three tax rates and income bands for non-savings, non-dividend income (NSNDI).
20% on the first £37,700; 40% on £37,701–£125,140; 45% on income above £125,140.
What starting rate applies to savings income and up to what amount?
0% on the first £5,000 of savings income.
List the dividend tax rates and bands.
8.75% on the first £37,700; 33.75% on £37,701–£125,140; 39.35% on dividends above £125,140.
Explain when no payments on account are required for income tax.
When over 80% of tax is deducted at source or total liability is under £1,000.
How is the personal allowance reduced for someone earning £120,000?
The £12,570 allowance is reduced by £1 for every £2 over £100,000. At £120,000, it is reduced by £10,000, leaving £2,570.
Outline the six steps to calculate an individual’s income tax liability.
- Aggregate total income streams; 2. Deduct allowable reliefs; 3. Deduct personal allowances; 4. Determine taxable income; 5. Compute tax on NSNDI, then savings, then dividends; 6. Subtract tax already paid to arrive at liability.
What is the opening-year rule in basis period rules?
Profits are assessed from the first day of trading rather than by accounting period.
Define GAAR and its role.
The General Anti-Avoidance Rule, which counters abusive tax avoidance arrangements.
Which individuals or entities are chargeable to Capital Gains Tax?
Individuals, sole traders, partners, and shareholders.
Give the formula to compute a basic gain for CGT purposes.
Disposal proceeds minus acquisition cost minus allowable expenditure.
Name three CGT reliefs and a key condition for each.
Business Asset Disposal Relief (10% rate, lifetime limit £1 million); Annual exemption of £3,000; Hold-over relief on gifts of qualifying business assets.
What CGT rate applies to gains on residential property?
0.24
By when must CGT on residential property be paid?
Within 30 days of the disposal.
What is the UK Corporation Tax rate and accounting year period?
25%, with accounting years running from 1 April to 31 March.
List the four types of loss relief available for Corporation Tax.
Carry forward; carry back; terminal loss carry back; group relief (for 75%-owned companies).
Explain the difference between output tax and input tax in VAT.
Output tax is charged on sales; input tax is charged on purchases and may be reclaimed against output tax.
At what annual taxable turnover must a UK business register for VAT?
When taxable supplies exceed £85,000 in a 12-month period.
What conditions must be met for 100% Business Property Relief in Inheritance Tax?
The business asset must be held as a sole trader or partner for at least two years, or shares in a private company.
What transactions does Stamp Duty Land Tax in England cover?
All transactions involving the acquisition of land or property in England.
State the residential SDLT rate for properties priced between £250,001 and £925,000.
0.05
Explain the first-time buyer relief for SDLT in England.
A 0% rate on the first £425,000 of purchase price for first-time buyers buying at £625,000 or less.
