Tax Compliance Flashcards
(218 cards)
1
Q
What is the basic personal allowance for 2023/24?
A
12570
2
Q
How to calculate adjusted net income?
A
Net income - gross gift aid donations - gross personal pension contributions
3
Q
At what income is the personal allowance withdrawn completely?
A
£125,140 and above
4
Q
How much can a spouse transfer of their personal allowance to their spouse?
A
£1260
5
Q
What conditions must be met for the marriage allowance transfer to be allowed?
A
Both spouses basic rate taxpayers
UK Residents
MARRIED
6
Q
What are the nil rate bands for taxpayers - SAVINGS?
A
£1000 basic rate taxpayers
£500 higher rate taxpayers
£nil for additional rate taxpayers
7
Q
What is the dividend mil rate band and who is entitled to it?
A
All taxpayers get £1000 nil rate bans
8
Q
What are main sources of exempt income?
A
Interest on national savings certificates
Interest from ISAs
Betting, lottery and premium bond winnings
Certain social security benefits
9
Q
When can an interest payment be deductible?
A
Buy plant or machinery for use in a partnership
Buy plant or machinery for employment purposes
Buy shares in a close company or employee controlled company
Invest in a partnership
10
Q
What is t he child benefit rate for the eldest or only child?
A
1248
11
Q
What is the child benefit rate for each other child (not eldest)?
A
827
12
Q
What is the tax charge for a recipient of child benefit who earns over £50,000?
A
1% of the child benefit for every £100 of adjusted net income between £50,000 and £60,000
£60,000 and above = full charge
13
Q
How to tax gift aid?
A
Gross up the donation amount if given net (x1.25)
Extend the basic rate and higher rate bands by the gross donation amount.
14
Q
How to deal with GAYE?
A
deduct the amount of the donation via GAYE from the employment income
15
Q
How to deal with gifting of assets to charity?
A
Deduction is given against total I come for gifts to charities of:
Shares and securities listed on a recognised stock exchange (UK or otherwise)
Land and Buildings
- the deductible amount is the market value of the asset at the date of the gift
16
Q
What is the basic rule for jointly owned assets?
A
Married partners are deemed to own the asset in equal proportions (50/50)
If declared, taxable income should be assessed based on the actual ownership basis.
17
Q
How should dividends from jointly owned shares taxed?
A
Always taxed according to actual ownership
18
Q
What is the cash basis of accounting?
A
Accounting for items for which the cash has actually been received or paid in the year
19
Q
What conditions must be met in order to use the cash basis of accounting?
A
Property receipts must not exceed £150,000
20
Q
What are the advantages of the cash basis of accounting?
A
Cash basis is simpler than accruals basis
Automatic bad debt relief
Only taxed when income is already received
Better for cash flows
21
Q
Who must use the accruals basis?
A
Property businesses with receipts exceeding £150,000
Those who elect to use the accruals basis by choice
22
Q
What are examples of allowable (deductible expenses)?
A
Legal, professional and admin costs NOT RELATED TO ACQUISITION
Finance Costs, ie interest payable on loans
Rates and taxes paid by landlords: ground rent, council tax
Insurance
Repairs and maintenance
Cleaning and Gardening
Replacement of domestic items (like for like)
Fixed rate deductions on motor vehicles
23
Q
How to tax if property is partly owner occupied and partly let?
A
Pro rate expenses
24
Q
When is replacement furniture not deductible?
A
The original cost of the first item of the furniture
The addition costs of an ‘improved’ replacement item above the cost of a like for like replacement
25
What can be deducted in terms of replacement furniture?
Amount that can be deducted is reduced by any proceeds from the sale of the old item but increased by any costs of disposal of the old item.
Remember - old item must not be available for use by the tenant.
26
In accruals basis, what relief is given for bad debts?
Debt written off by landlord if remains unpaid.
Relief is given for the amount written off.
27
What is rental loss carried forwards set against?
First available future property income
28
How is interest on mortgages or loans to buy furniture treated?
Deductible as a tax reducer
29
How to calculate the reduction for interest costs related to letting residential properties?
20% of the lowest of:
Finance costs for the tax year plus any finance costs brought forward
Property income for the tax year
Adjusted total income - income that exceeds personal allowance for tax year
30
What is the deduction limited by in finance costs?
Limited by the property income or adjusted total income then remaining finance cost not utilised.
It cannot be used to create a refund
31
What is the maximum rent a room relief?
£7500 exempt from income tax
32
RRR: if gross annual rent is > £7500, what options does the tax payer have?
a) apply normal property income rules
b) taxed on rental income in excess of £7500
33
RRR: what about if 2 or more people share a home?
Each has an RRR of £3750 (£7500 / 2)
The limit is always halved even if 3 or more co owners
34
How to deal with personal pension schemes?
Extend the bands
35
How to deal with occupational pension schemes?
Reduce employment income by the contribution amount
36
What is the maximum gross contribution that can be made by an individual into a pension annually?
Higher of:
Individuals relevant earnings chargeable to income tax in the year
The basic amount (£3600)
37
Who are employer contributions to pension schemes exempt for?
For the employee
No limit on contributions from employer but will count towards the annual allowance
38
Are employer contributions tax deductible?
Yes
39
What is the annual allowance for 23/24?
£60,000
40
What is the lifetime allowance?
1073100
41
When are general earnings treated as being received?
On the EARLIER of:
The date the payment is made
The date the employee becomes entitled to payment
42
When are general earnings treated as received for DIRECTORS?
Same as normal 2 plus:
Or the date the earnings are credited in the company’s records or accounts
The end of a period of account if earnings are determined before period end
The date of earnings are determined if the amount is not determined until after the end of the accounting perood
43
What is the taxable benefit for non cash vouchers?
Cost to employer less amount paid by employee (if any)
44
What is the taxable benefit on cash vouchers?
Cash obtainable less amount paid by employee
45
When is there no benefit on living accommodation?
No benefit if job related.
46
What is the basic charge?
Higher of annual value and rent paid
47
What is the addition charge calculation?
If accom cost over £75,000:
Cost - 750000 x 2.25%
48
Do not use
No answer
49
What is the taxable benefit on the provision of living expenses?
Generally taxable on costs to employer less amounts paid by employee
50
How to calculate private benefit on cars for private use?
Co2% * list price
Co2% increased by 4% for diesel cars not meeting RDES 2 standards
Max co2% = 37%
Reduce list price by up to £5000 for any actual capital contributions made by employee
Reduce benefit by any actual contribution made by the employee towards the use of the car
51
How to calculate fuel benefit?
Co2% * 27800
52
What is the flat rate benefit for the private use of a van?
3960
If zero emission van, benefit is 0
Flat rate benefit for provision of private fuel of £757
53
What is the benefit on assets being made available for private use?
20% of the market value of the asset when first provided less amount payable by employee
54
What are the general rules for when a deduction is allowed for an expense?
The employee is obliged to incur and pay the expense
The amount is wholly, exclusively and necessary in the performance of duties of the employment of employee
55
When may an employee deduct travel expenses?
Expenses were incurred in the necessary fulfilment of duties
They are not related ordinary commuting or private travel
56
Are specific reimbursements allowable as deductions?
Yes
57
Are general reimbursements allowable?
No
58
Are subscriptions to professional bodies deductible?
Yes
59
What is the allowable mileage expenses for a car or van?
45p for first 10000 miles, 25p thereafter
60
Rate per mile allowed for a motorcycle?
24p
61
What is the allowable rate per mile for a bicycle?
20p
62
What is the passenger payment rate per mile?
5p
63
What is the taxable benefit for the gift of an asset that was previously loaned to the employee?
HIGHER OF:
Current market value
Market value when asset was first provided for use less any amounts already taxed under the private use rules
64
When are employee loans exempt?
When total loan value is less than £10,000
65
How to calculate the benefit on a loan greater than £10k?
Loan balance * 2.25%
Less interest paid
= benefit
66
What are the common exempt benefits?
Employer pension contributions
A trivial benefit less than £50 and not work related
One mobile phone
Parking space at or near work
Reasonable removal expenses (up to 8k)
Provision of electric car charging points available to general employees
67
How to calculate benefit busing average method for loans?
Loan at start year + loan at end of year / 2
68
What is the strict method for calculating taxable benefit on loans?
Weighted average based on actual repayments
Time apportion the outstanding balance taking into account repayments and the months these repayments occurred
69
What are the badges of trade?
Profit seeking motive
Number of transactions
Nature of assets
Existence of similar transactions
Changes to the asset
Way sale was carried out
Source of finance
Method of acquisition
70
What do you add back during profit adjustment?
Add back anything that is not wholly and exclusively for the purpose of trade
71
What are the old CYB rules?
An individual is taxed on the adjusted trading profits for the 12 months period or account which ends in the tax year
72
How to calculate tax for year when a business commenced trading in the transition period 23/24?
The individual is taxed on the profits from the commencement date, to the 5th April
73
What to do with overlap profits?
Take them away from cessation of trade tax figure
74
What are the tax basis rules at cessation?
Profits taxed are:
Profits from the end of basis period of the penultimate tax year until the date of cessation (ie any profits not yet taxed)
LESS any overlap profits
75
What are the 2 parts of the transitional rules?
Standard part - first 12 months of the basis period
Transition part - period that begins immediately after the standard part ends
76
What are the 6 steps for calculating 2023/24 trading profits?
Step 1 - calculate the profit / loss of the ‘standard’ part of the basis period
Step 2 - calculate profit/loss from transition part of basis period
Step 3 - deduct overlap profits from step 2
Step 4 - add together standard and transition parts - if step 3 or 4 = 0 or a loss this is the profit / loss
Step 5 - calculate amount of total transition profit (lower of step 3 and 4). This is split over 5 years, 20% each year
Step 6 - taxable profit = step 1 + step 5
Or just step 5 (if step 1 gave a loss)
77
Do you time apportioned FYA?
No never
78
Do you time apportioned FYA?
No never
79
If a business is VAT registered, what cost is used for capital allowance calculation?
VAT Exclusive price
EXCEPT FOR
Cars (vat inclusive)
80
When can you claim back VAT on a car?
When it is a pool car with:
100% business use
Available to all employees
Must stay at business premises overnight
81
What assets are included in main pool?
All machinery, fixtures, fittings and equipment
Vans, forklifts, Lorries etc
Cars with co2 emissions of 50g/kn or less with NO PRIVATE USE
82
What is 100% FYA available on?
New plant and machinery (companies only)
Qualifying capital expenditure on research and development (companies)
New and unused cars with 0 co2 emissions
New and unused goods vehicles with zero co2 emissions
Electric charge point equip (before 6 April 2025)
83
What is AIA allowance for 12 months?
1 000 000
84
What should AIA be allocated to as a priority?
Qualifying special rate pool purchase
- more tax effective
85
What can be included in the special rate pool?
Long life assets
Thermal insulation of buildings
Integral features
Solar panels
Cars with co2 emissions in excess of 50g/km
86
What is the WDA rate on the special rate pool?
6%
87
When is an item classed as a long life asset?
Working life of more than 25 years
Total expenditure exceeds 100k in 12 month accounting period (or prorate)
88
What are integral features?
Electrical systems
Cold water systems
Lifts escalators moving walkways
External solar shadonf
89
Which types of asset are not included in the main pool but are included separately in their own pool?
Assets with some private use by sole trader
Short life assets
90
When are short life assets used?
When all the AIA allowance has been used.
91
When do you have a balancing allowance on the main pool / special rate pool?
Cessation of trade
92
When do you have a balancing charge on the main pool or special rate pool?
Cessation of trade
OR
Balance on pool is negative
93
When do you have a balancing allowance on a single asset pool?
Asset sold for less than TWDV
94
When do you have a balancing charge on the single asset pool?
Asset sold for more than TWDV
95
How to calculate capital allowances in the final period before cessation?
No FYAs, AIAs, WDAs given in final period
Disposal value of each asset deducted from the balance of pools giving rise to balancing allowances and balancing charges
96
What is the calculation for the structures and buildings allowance?
3% straight line basis on qualifying expenditure
97
When to prorate SBAs?
Accounting periods of not 12 months
Where structure brought into use or sold during the period
Or if any part of it is used as a dwelling
98
What are qualifying structures for SBAs?
Offices
Retail and wholesale premises
Factories
Warehouses
Hotels
Roads walls bridges and tunnels
99
What is qualifying expenditure for SBAs?
Construction cost or acquisition cost if bought from a developer
100
What is not qualifying expenditure?
Cost of land
Cost of planning permission
Fees
Stamp taxes
101
What to do with SBAs where a structure is partly used in trade and partly rented out?
A full allowance is claimed by the deduction from profits is apportioned between trading income and property income.
102
What is s83 carry forward loss relief set against?
Future trading profits from the same trade
Carries forwards until fully utilised or cessation of trade
It is automatic
103
What is s64 current year and or prior year set against?
Total income, NSI, SI then div
Time limited to current year and or prior year
All or nothing approach
104
What is s64 current year and or prior year set against?
Total income, NSI, SI then div
Time limited to current year and or prior year
All or nothing approach
105
What is s.261B TCGA relief against gains set against?
Gains before other capital losses
106
What is s72 loss in first 4 tax years set against?
Total income (NSI, Si then Div)
Time limits - carry back to prior 3 years on a FIFO basis
107
What is s89 terminal loss relief on cessation set against?
Trading profits from same trade.
Carry back to prior three years on a LIFO basis
108
What is the loss relief restricted to for non active traders?
£25,000 when making a loss claim against total income or against capital gains
109
When will a loss be restricted?
If a trader spends on average less than 10 hours per week personally involved in running the business
110
What is the limit for s64 and s73 loss relief against total income for non trading income?
The higher of:
£50,000
25% adjusted total income for the tax year in which the deductions are offset
111
How much taxable trading income will a partner with a notional loss have?
None
112
What to do with notional loss for other partners?
The loss is reallocated to the remaining partners in proportion to the profit initially allocated to them
113
What are examples of chargeable persons?
Individuals
Partners
Trustees
Companies
114
Examples of chargeable disposals?
Sale of the whole or part of an asset
Gift of whole or part of an asset
115
Examples of chargeable disposals?
Sale of the whole or part of an asset
Gift of whole or part of an asset
116
What are exempt assets for capital gains?
Motor cars (including vintage and classic )
Wasting chattels
Non wasting chattels sold for a again with consideration that does not exceed 6k
Gilt edged securities
Qualifying corporate bonds
National savings certificates and premium bonds
Shares and investments in an ISA
117
What are incidental costs of acquisition examples?
Legal fees
Surveyor fees
118
What is the formula for part disposals?
Cost * a/ a + b
A = market value of part disposed
B = market value of sort retained
Any incidental costs are deductible in full
119
What is the annual exempt amount for CGT?
£6000
120
Rule of thumb for offsetting trading losses against capital gains?
In order to offset against capital gains, you need to offset the maximum pint possible in the year in which the capital gains occurred
121
Capital gains % on assets?
10% or 20%
122
What are gains on residential properties taxed at?
18% or 28%
123
What capital gains are incurred on disposals between spouses and civil partners?
No gain no loss
124
What value is used for cost when selling an asset after a transfer between spouses?
Market value, not cost
125
What are the main share matching rules - in order?
Same day as disposal first
Following 30 days on FIFO basis (sole traders)
Any shares in the s.104 pool
126
How to determine market value of quotes shares given as gifts?
Lower quoted price +
1/2(higher quoted price - lower quoted price)
ie. The mid point
127
When is the payment on account due after the sale of a residential property?
Within 60 days of completion
128
When is the payment on account due after the sale of a residential property?
Within 60 days of completion
129
What are qualifying assets for rollover relief?
Land and buildings
Fixed plant and machinery
Goodwill (individuals only)
130
When is rollover relief frozen until of depreciating assets?
Earliest of:
The disposal of replacement asset
10 years after the acquisition of the replacement asset
The replacement asset ceases to be used in the taxpayers trade
131
What are qualifying assets for gift relief?
Assets used in a business carried on by the donor or donors personal company (at least 5% voting rights)
Shares or securities* in a trading company where either shares are unquoted or the company is the donors personal company
132
When is gift relief not available?
Not available on the gift of shares or securities where the donee is a company
133
When is gift relief restricted?
Where there’s a gift of qualifying shares in the donors personal company and the company holds some investments. This is restricted to:
Chargeable business assets / chargeable assets
2. Where actual consideration is received
134
Examples of chargeable business assets?
Freehold and leasehold premises
Goodwill
Plant and machinery
135
What is the limit on BADR?
1 million
136
Conditions for qualifying for BADR on unincorporated business?
All or partial ownership of the business
Owned for at least 2 yeats
137
Conditions for qualifying for BADR on disposal of shares?
>5% ordinary shares / voting rights
Officer or employee
Trading company
Above conditions met for 2 years
Not restricted for non trade assets
138
Conditions for qualifying for BADR on assets?
Sold following cessation of the business
Business owner for 2 years prior to cessation eith assets sold within 3 years of cessation
139
What happens if an individuals shareholding is diluted to below 5% as a result of a share issue?
It is possible to elect for BADR to continue to be available for gains up to the date of the share issue
140
What are examples of deemed occupation which must be followed by a period of actual occupation?
3 years for any reason
Anytime in overseas employment **
Up to 4 years working elsewhere in UK
** does not need to be followed by occupation if prevented from occupying by employer
141
What is always deemed occupation?
Last 9 months prior to sale
142
What is the lifetime limit on investors relief?
10 mil
143
What qualifies for investors relief?
Shares disposed by an individual must:
have been subscribed as new ordinary shares by individual making the disposal
Be in an unlisted trading company, or hold co of a group
Have been issued by the company on or after 17.03.16 and were held for at least 3 years after 6.04.2016
Be held continuously for 3 years before disposal
144
What is PRR calculated as?
The relief is calculated as:
Actual and deemed occupation / ownership x net gain
145
What is letting relief figure used as?
Lowest of:
Letting gain
PRR
£40,000
146
What is the remittance basis?
Only foreign income / gains enjoyed in the UK are taxed in the UK.
All income remitted is taxed as NSI and therefore it cannot benefit from savings or dividends nil rate bands
147
How to access the remittance basis?
Automatic with 0 negative consequences if I remitted income / gains are less than £2000
Otherwise must claim on self assessment tax return and:
-lose entitlement to personal allowance and annual exempt amount
-pay remittance basis charge if long term resident ages over 18
148
What is double taxation relief?
Lower of:
Overseas tax suffered
UK tax on overseas income / gains
149
What is class 1 primary national insurance - who pays it, what is it based on, when is it due and what rate is it taxed at?
Employees pay it
Based on cash earnings, incl mileage payments, readily convertible assets and vouchers
Due every earnings period, through PAYE
Rate: 12% between primary threshold and upper limit. 2% on excess above this
150
What is the rate for class 1 secondary NI?
13.8%
151
What is the rate for class 1a NI?
13.8%
152
What is the rate for class 1B NI?
13.8%
153
What is the rate for class 2 NI?
£3.45 per week if earnings over 12570
154
What is the rate of class 4 NI?
9% above lower limit and below upper
2% above upper
155
When is the employment allowance available (NI Terms)?
Applies to most employers
When employee is NOT a single director
Class 1 Secondsry liabilities less than £100k
156
How to calculate disposable income?
Income received after income taxed and national insurance contributions
157
How to calculate effective rate of tax for individuals?
Dividing the total tax liability including income tax and NICs by their total income
158
What are the exemptions on lifetime gifts and transfers on death?
Transfer to spouse or civil partner
Gifts to Charities
Gifts to Political parties
159
What are the marriage gift allowances?
£5000 parent
£2500 remote ancestor
£1000 any other case
160
Small gift exemption value?
Less than £250
161
What is the annual exemption?
£3000
162
How to use annual exempt amount?
Used against transfers in chronological order.
Unused excess is used can be carried forward to next tax year
Current year AE must be used before any amount from previous year
163
What rate of tax is used when the donor pays the tax?
25%
164
What are not examples of official debts?
Gambling debts
Promises to pay someone
165
What are the hallmarks for the residence nil rate band?
Individual dies on or after 6 April 2017
Death estate includes their home
Home inherited by direct decscendants of the deceased
166
How much is the residents nil rate band?
£175,000
167
How to taper the nil rate band and when?
If value > £2million:
Tapered by £1 for every £2 which the estate exceeds £2million
168
How to calculate the value of an asset transferred for IHT purposes?
Value of holding prior to transfer
Less value of holding after transfer
169
How are quoted shares listed on the stock exchange valued for IHT?
Lower of:
- Quarter Up Rule
- average of the highest and lowest marked bargains on the day of the transfer
170
What is the quarter up rule in IHT?
Lower quoted price + 1/4(higher quoted price less lower quoted price)
171
What is related property hallmarks?
Property held by the transferor and:
- held by spouse or civil partner
- held or has been held in last 5 years by a charity or political party
172
How to calculate proportionate value for related property?
Value of property transferred at unrelated value / value of property transferred at unrelated value PLUS value of related property at unrelated value
x value of whole property
173
What is fall in value relief?
If an asset gifted in lifetime is sold for less than original transfer value or market value at death is lower, then taxpayer can elect that the death tax is based on the lower value.
174
How to transfer nil rate bands between spouses?
Unused % of nil rate band is transferred across to the other spouse
175
How to calculate quick succession relief on entire estate?
Tax paid on earlier death x (value of estate - tax paid on earlier death) / value of whole estate
176
How to calculate QSR on specific assets?
Tax paid on earlier death x value of asset at death / value of estate x relevant %
* relevant % found in hard man’s
177
What is the reduced rate for IHT and how to gain it?
36% IF you leave at least 10% of net chargeable estate to charity
178
Business property relief rates?
50% or 100%
179
Hallmarks for business property relief?
Owned for for at least 2 years prior to transfer
180
When does business a property relief not apply?
Business consists wholly or mainly dealing in securities, stocks, shares, land and buildings or holding investments
- where there is a contract in place to sell the property
181
How to calculate the value of the property that will qualify for relief?
Net assets - investments / net assets
182
How to calculate the value of the property that will qualify for relief?
Net assets - investments / net assets
183
Penalties on late filing of IHT?
Immediate £100 fixed penalty
Daily penalties of up to £60 after failure to deliver had been declared by court or tribunal
After 6months a further £100 fixed penalty
After 12 months, a further penalty of up yo £3000
184
Penalties on late filing of IHT?
Immediate £100 fixed penalty
Daily penalties of up to £60 after failure to deliver had been declared by court or tribunal
After 6months a further £100 fixed penalty
After 12 months, a further penalty of up yo £3000
185
What is the super deduction rate?
130%
186
What is super deduction available on?
New or (not second hand) assets
187
What is super deduction / FYA NOT available on?
Second hand items
Cars
Not available in period of cessation of trade
188
When was full expense relief available?
Between 1 April 2023 and 31 March 2026
189
What are the benefits of full expense relief?
FYA @ 100%
Main pool assets only
New (not second hand) assets
Not available for cars
Not capped
Balancing charge on disposal (100% of lower of proceeds and costs)
Cannot claim FYA and AIA on same expenditure
190
How to split long periods of account?
First 12 months
Then the excess separately
191
How to calculate augmented profits?
Total taxable profits + exempt ABGH distributions
192
Where does marginal relief apply?
Where augmented profits are over £50,000 but do not exceed £250,000
193
How to calculate marginal relief?
(Upper limit - augmented profits) x taxable total profits x 3/200
194
When is a company associated with another company?
If:
One company is under the control of another company
Both are under common control of a third party
Dormant companies are excluded
Included non UK resident companies
*if a company is associated for part of the accounting period, treat as associated throughout*
195
How to calculate indexation allowance?
Cost x RPI in month of disposal(or Dec2017) - RPI in month of expenditure / RPI in month of expenditure
196
How many decimal places for indexation?
3
197
How to treat capital losses in companies?
Current year loss automatically offset against other gains in same accounting period
Excess capital losses are carried forwards and set against the first available gains in the following accounting period.
198
Order of share disposals for companies?
Any acquisitions made on same day as date of disposal
Any acquisitions within previous 9 days on a FIFO basis
Shares in s.104 pool acquired on or after 1 April 1982
Any shares in 1982 pool
199
Do you index on a bonus issue?
No
200
What IFA expenses are adjusted for tax purposes?
Any amortisation or impairments
ALWAYS ADD BACK
201
Conditions for a small or medium sized business?
Fewer than 500 employees
And either:
Annual turnover not exceeding 100 million euros
Annual balance sheet not exceeding 86 million eiros
202
When is a company resident in the UK?
If it is incorporated in the UK
Incorporated outside of the UK but its central control and management are exercised in the UK
203
How does current year loss relief work for companies?
Claim to set losses against total profits in the same accounting period.
204
What is terminal loss relief?
Can be carried back against companies profits for preceding 36 months on a LIFO basis
205
What is the priority of loss relief claims?
First to last:
- deficits on non trading loan relationships
-property business losses
- trading losses of the current period
206
What is a group for group relief purposes?
One company is a 75% direct or indirect subsidiary of another company
Or
Both companies are 75% direct or indirect subsidiaries of a third company
207
How can group relief be surrendered for the current year?
Can be used against:
Trading losses
Deficits on non trading loan relationships
Excess qualifying charitable donations
Excess property business losses
208
What is test 1 for partial exemption?
a) total input VAT is less than or equal to £625 on average
b) exempt supplies are less than or equal to 50% total supplies
209
What is test 2 for VAT partial exemption?
Only do if test 1 failed.
a) total input VAT less input tax directly attributable to taxable supplies less than or equal to £625 on average
and
b) exempt supplies of less than 50% of total supplies for a period
210
How to work out % taxable sales?
Supplies of taxable items / total supplies
Round up to nearest whole %
211
What are advantages of opting to tax?
Vendor / landlord can reclaim import tax on original costs and ongoing t expenses in relation to the property
212
What are the disadvantages of opting to tax?
If purchaser or tenant is not VAT registered they cannot recover VAT
Increased price for the buyer
213
What does the capital goods scheme for VAT apply to?
Single computers costing > 50k exclusive of VAT
Land and buildings costing > 250k exclusive of VAT
Aircrafts, ships, boats and vessels > 50k exclusive of VAT
214
What is stamp duty payable on?
Paper based transfers of shares
215
What is rate for stamp duty?
Purchaser pays 0.5% consideration rounded up to the nearest £5
No duty if consideration is less than £1000
216
What is stamp duty land tax charged on?
Chargeable on land transactions
217
What is SDLT calculated on?
The VAT inclusive amount and it is payable by the purchaser
218
What are the exemptions from SDLT?
Transfers for no chargeable consideration (gifts)
Transfers on divorce
Transfers on variation of a will
Transfers of land between 75% group companies
