Tax Compliance Flashcards
What is W+T allowance formula?
10% x [rental income - (water rates + council tax) x a/52]
Might time apportion
A = no of weeks property is available for let (when there’s tenants or empty, not owner occupied)
What is the advantage of furniture holiday accommodation? (Income tax)
1) Possibility of increasing amount of pension contributions which qualify for tax relief
2) Capital allowances are available on furniture - AIA instead of W+T (wear and tear)
What is the advantage of furniture holiday accommodation? (Capital gains tax)
furnished holiday accommodation - property is treated as a business asset for relief purposes
How do you do capital allowances on cessation?
1) no FYAS, AIAs or WDAs
Figure out balancing allowances/charges
Then do basis periods AFTERWARDS
The use of trading losses - carry forward
What is it set against and what are the time limits?
Future trading profits only and carries forward until fully utilised or cease to trade
What we do with gift of assets to charities in IT?
Deducting from IT - you get tax relief
FOR 1) shares or securities on a recognised stock exchange
2) Land and buildings
Market value at date of gift
When are deductions given? For what type of loans
Business-related loans
Eg buy plant or machinery
Buy shares in a close or employee controlled company
Invest in a partnership
DONT GROSS UP
What sources of income are exempt for IT?
Interest on NSC (National Savings Certificate)
Income from NISAs
Betting, lottery and premium bond winnings
Certain social security benefits
What is done with patent royalties?
Received net of 20% tax (so only 80%)
Gross up by 100/80
ADD TAX (retained for HMRC) to our IT liability
Do you remove as a credit as well - check notes
What is the case with child benefit?
Everyone receives child benefit in full (£1076 for first child, £712 for other children), CHECK HARDMANS if we pay any back (for high earners)
What happens in GAYE re: IT? (Payroll giving scheme)
Deduct donation from employment income and IT is calculated on that
What do you do with qualifying business expenses eg travel?
Deduct them off employment income for IT COMP
How is the taxable benefit worked out for houses? (Include the formula)
Annual value of rent free
If moved in more than 6 years ago, market value. If not, cost (?? CHECK).
Formula: (price - 75000) x 3%
What are steps for change of accounting date?
1) identify tax year of change (earlier of - accounts at new date, accounts at old date + 12m)
2) CYB before and year of change (set of accounts that end in the tax year)
3) TAX THE GAP (between CYB)
4) bring the gap to 12m
LESS THAN 12m - take profits from PY
MORE THAN 12m - take ? months off overlap
What are the options if one is resident but not UK domiciled?
Don’t claim remittance basis - EVERYTHING IS NORMAL
Remittance basis -
ONLY UK INCOME AND REMITTED O/S
:( NO PA/NO AE
:( Remittance basis charge (added to tax liability)
What to do with income tax if you are not a UK resident?
Tax UK income only
Gains: NONE besides UK residential property
UK resident and UK domiciled, what do you do with income tax?
Everything is normal - tax worldwide income and gains
DTR
(Like when you’re not domiciled and don’t choose RB)
What goes under NSI for remittance basis?
Only remittance income goes to NSI.
Other remitted stuff goes to SI and DI
Conditions to qualify for qualifying holiday accommodation? How many?
- 1) UK or EEA
2) Furnished
3) Avail for letting to the public (tenants or empty) for <210 days in tax year
4) At least have tenants for half (105 days)
5) Not occupied for periods of ‘longer-term occupation’ (LTO -more than 31 consecutive days to the same person) for more than 155 days (5 periods)
6) Periods of LTO do not contribute to 105 day limit
Conditions to qualify for qualifying holiday accommodation? How many?
- 1) UK or EEA
2) Furnished
3) Avail for letting to the public (tenants or empty) for <210 days in tax year
4) At least have tenants for half (105 days)
5) Not occupied for periods of ‘longer-term occupation’ (LTO -more than 31 consecutive days to the same person) for more than 155 days (5 periods)
6) Periods of LTO do not contribute to 105 day limit
What is the impact on
A) employees paying into personal pension scheme
B) employers paying into personal pension scheme
A) higher of 3600 and relevant earnings
Gross up, deduct from source and bands it
Contributes to ANI (income - gross personal pension contributions - gift aid)
B) exempt from IT (in employment income)
Trade-deductible expense in trading income in accounting period that payment is made
Contributes to pension charge
How do you work out pension charge for annual allowance?
Gross employee contributions
+ employer contributions
Less annual allowance
Can you carry forward annual allowance for tax-relievable pension contributions? If so, how?
Yes 1) CY 15/16 Then FIFO 3 years back 2) 12/13 3) 13/14 4) 14/15
What happens when employers pay into occupational pension scheme and GAYE?
- GAYE (charitable donation via payroll giving scheme) is a deduction in employment income
- employers contributions are exempt for any scheme
What happens when individual contributes to occupational pension scheme?
It is deducted from employment income
How to do rollover relief on depreciating assets and non-depreciating assets?
Gain is the non-reinvested proceeds (from 1st qualifying asset to 2nd)
No depreciating
Gain goes on base cost of 2nd asset
Depreciating Gain is frozen until earliest of - disposal of replacement asset - 10 years after acquisition of replacement asset - replacement asset is not used in trade
Staff and client (overseas and UK) entertaining:
A) Allowable for trading income/employment income
B) Allowable for VAT
A) staff are allowable but client has to add back. (Makes sense - shouldn’t be allowed deductions for client parties)
B) UK customers are not allowed but overseas are and staff
When to recognise earnings?
Earlier of
Date payment is made
Date employee is entitled to payment
When to recognise earnings for EI for directors?
1) date earnings are credited in company’s accounts
2) If determined BEFORE end of period –> end of period
3) If determined AFTER end of period –> date they’re determined
Is R&D capital expenditure allowable for relief?
Eligible for 100% first year allowance
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
If you are a tenant and doing your trade adjustments, do you get a trade deduction?
Yes. Comes off cost if doing gain
Property income of landlord (premium X %rent(total no.) X sublease duration/total no of years)
As a landlord, what is your trade deduction in corporation tax?
Premium X %income (H43) X for one year X any time apportionment
How are patent royalties or other intangibles treated?
A) company
B) sole trader
A) no adjustment
B) 20% is paid to HMRC
Gross up and add as an extra trade deduction
When doing Test 3 for recoverability of VAT, how do you work out the % for non-attributable input VAT?
Taxable sales/total sales
Needs to be VAT-exclusive and round up to the next %
Is stamp duty applicable on VAT inclusive or exclusive prices?
VAT inclusive
For lease premium, where do you look for rates and where is Hardman wrong?
Same place as land
1% although H says 0%
When
1) non-residential
2) rent >1000 pa
What is fall in value relief?
1) if sold at death < less than MV at gift
2) if still held < original MV at gift
Deduct from gift in P2 ONLY
For inheritance tax, what assets do you include in the free estate?
1) UK-domiciled
2) non-UK domiciled
Assets held at death
A) UK Dom = W/w assets
B) Non-UK Dom = UK assets
In inheritance tax, what do you deduct from nil rate band at
A) lifetime inheritance tax
B) death inheritance tax
C) death estate
GCT = net CLT + donor paid IHT
A&B) less any GCTs 7 years before gift
C) less any GCTs 7 years before death
What can you not claim input tax on always?
A) no blocked VAT - any private use eg company cars, UK client entertaining
B) wages and dividends
What to do with fuel scale charge and fuel expenses ?
Recover all fuel expenses
Put fuel scale charges VAT in output tax
What is the calculation for CApital goods scheme for when taxable use changes?
%now - %original X total input VAT paid/5 or 10 (depends on what it is)
More taxable use - recover more from HMRC
Less taxable use - repay more to HMRC
In 1st year, state what can be recovered and not recovered
Tell me the VAT rules for
A) Sales to EU
B) Sales to non-EU
C) Services to overseas (EU and non-EU)
A) No VAT registration - 20%
VAT registration - 0%
B) Sales to non-EU - 0% (different VAT rules)
C) EU rules -
Overseas customer with VAT - rather than 0% (under EU rules) = exempt supply (cannot recover input tax)
Tell me the VAT rules for
Purchase for non EU
Purchase for EU
Purchase for non EU - 20%
Purchase for EU - VAT neutral - need to put in both output and input to net of 0
When do you think of partial exemption tests?
When you have purchases that relate to exempt supplies or general expenses that cannot be attributable to supplies
What are the VAT implications for selling/constructing a new commercial building or old commercial with option to tax?
Work on it
New commercial building (less than 3 years old)
Charge 20% output tax
Recover any input tax (on /materials etc)
For old commercial buildings:
- can’t recover input tax when selling it
- can charge VAT on rent and later sale
For class 1b NIC, under PSA, what is the unique difference with gifts to employees from employers?
Gross up gift dependent on whether basic, higher or additional rate
What is the QSR formula?
Tax paid on chargeable estate X net transfer*/chargeable estate
*what is person receiving
When it’s specific gift (specific legatee) = gross
Residual legatee (remainder of death estate) = gross - tax
How to use the rent a room allowance?
For property income - Lower of Income less RAR (4250) Or Income less allowable expenses
What are the criterion and implications for marriage allowance?
Transferor must have <10600 of taxable income
Recipient must be a BR taxpayer
Will have normal PA
Will be taken off tax liability ie 20% X 1060 = 212
How to restrict MCA?
If old and rich and have MCA, restrict it by taking the excess off 8355 then multiply by 10%(which is taken off tax liability)
What is the calculation for transfer of a gift?
Higher of
MV when gift given to you
And
Original value - less benefits to date
What is childcare vouchers worked out on (for external childcare)?
Childcare is worked out on taxable EI (after PA)
Employer-provided childcare - exempt
What value is stamp duty worked out on?
The actual cost to you
What are the rules for slabbing?
Only residential properties post-2014
How do we treat lease costs and emissions for cash basis?
Don’t care
What is the criteria for a loss relief group?
<75% direct
<75% indirect; subsidiaries
Can be in more than one group
What is the criterion for a gains group?
At least 75% direct
51% indirect
Can only be in one group
When is gift relief allowed?
What is the proforma?
- unquoted trading company
- either a complete gift
- less than MV (if money involved)
Proceeds (MV) Cost Chargeable gain Gift relief (balancing figure) Gain (actual proceeds - original cost)
What is the criteria for ER?
Five >5%
Trading co
Twelve (12m) owned
Work there
Rates taxed at 10%
Still treat it as taxable income when knowing what to tax non-ER gains
What share relief is applicable for each tax?
IHT
BPR
CGT
GIFT RELIEF
ER
CO = CHARGEABLE GAIN
SSE
What to do with disposals for CAs?
Lower of proceeds and cost
What is considered to be a depreciating asset for rollover relief purposes
Expected life of 60 years or less
P+M = always depreciating besides if part of building
If part of building = building lease is 60 years or less
When is entrepreneurs relief used?(under what circumstances)
In CGT- 10%
F <5% of shares
T held for twelve months
Trading company
Works there
Sold part/whole of business (sole trader/partnership)
Assets following cessation of trade
When is gift relief used?
- unquoted or quoted (>5%) shares
- assets used in a business
Gain that is chargeable = actual proceeds - original cost
Gain X chargeable business assets/chargeable assets IF gift of quoted shares and company holds investment
Proceeds is deemed to be market value
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
If you are a tenant and doing your trade adjustments, do you get a trade deduction?
Yes. Comes off cost if doing gain
Property income of landlord (premium X %rent X years used/total no of years)
As a landlord, what is your trade deduction in corporation tax?
Premium X %income (H43) X for one year X any time apportionment
How are patent royalties or other intangibles treated?
A) company
B) sole trader
A) no adjustment
B) 20% is paid to HMRC
Gross up and add as an extra trade deduction
When doing Test 3 for recoverability of VAT, how do you work out the % for non-attributable input VAT?
Taxable sales/total sales
Needs to be VAT-exclusive and round up to the next %
Is stamp duty applicable on VAT inclusive or exclusive prices?
VAT inclusive
For lease premium, where do you look for rates and where is Hardman wrong?
Same place as land
1% although H says 0%
When
1) non-residential
2) rent >1000 pa
What is fall in value relief?
1) if sold at death < less than MV at gift
2) if still held < original MV at gift
Deduct from gift in P2 ONLY
For inheritance tax, what assets do you include in the free estate?
1) UK-domiciled
2) non-UK domiciled
Assets held at death
A) UK Dom = W/w assets
B) Non-UK Dom = UK assets
In inheritance tax, what do you deduct from nil rate band at
A) lifetime inheritance tax
B) death inheritance tax
C) death estate
GCT = net CLT + donor paid IHT
A&B) less any GCTs 7 years before gift
C) less any GCTs 7 years before death
What can you not claim input tax on always?
A) no blocked VAT - any private use eg company cars, UK client entertaining
B) wages and dividends
What to do with fuel scale charge and fuel expenses ?
Recover all fuel expenses
Put fuel scale charges VAT in output tax
What is the calculation for CApital goods scheme for when taxable use changes?
%now - %original X total input VAT paid/5 or 10 (depends on what it is)
More taxable use - recover more from HMRC
Less taxable use - repay more to HMRC
In 1st year, state what can be recovered and not recovered
Tell me the VAT rules for
A) Sales to EU
B) Sales to non-EU
C) Services to overseas (EU and non-EU)
A) No VAT registration - 20%
VAT registration - 0%
B) Sales to non-EU - 0% (different VAT rules)
C) EU rules -
Overseas customer with VAT - rather than 0% (under EU rules) = exempt supply (cannot recover input tax)
Tell me the VAT rules for
Purchase for non EU
Purchase for EU
Purchase for non EU - 20%
Purchase for EU - VAT neutral - need to put in both output and input to net of 0
When do you think of partial exemption tests?
When you have purchases that relate to exempt supplies or general expenses that cannot be attributable to supplies
What are the VAT implications for selling/constructing a new commercial building or old commercial with option to tax?
Work on it
New commercial building (less than 3 years old)
Charge 20% output tax
Recover any input tax (on /materials etc)
For old commercial buildings:
- can’t recover input tax when selling it
- can charge VAT on rent and later sale
For class 1b NIC, under PSA, what is the unique difference with gifts to employees from employers?
Gross up gift dependent on whether basic, higher or additional rate
What is the QSR formula?
Tax paid on chargeable estate X net transfer*/chargeable estate
*what is person receiving
When it’s specific gift (specific legatee) = gross
Residual legatee (remainder of death estate) = gross - tax
How to use the rent a room allowance?
For property income - Lower of Income less RAR (4250) Or Income less allowable expenses
What are the criterion and implications for marriage allowance?
Transferor must have <10600 of taxable income
Recipient must be a BR taxpayer
Will have normal PA
Will be taken off tax liability ie 20% X 1060 = 212
How to restrict MCA?
If old and rich and have MCA, restrict it by taking the excess off 8355 then multiply by 10%(which is taken off tax liability)
What is the calculation for transfer of a gift?
Higher of
MV when gift given to you
And
Original value - less benefits to date
What is childcare vouchers worked out on (for external childcare)?
Childcare is worked out on taxable EI (after PA)
Employer-provided childcare - exempt
What value is stamp duty worked out on?
The actual cost to you
What are the rules for slabbing?
Only residential properties post-2014
How do we treat lease costs and emissions for cash basis?
Don’t care
What is the criteria for a loss relief group?
<75% direct
<75% indirect; subsidiaries
Can be in more than one group
What is the criterion for a gains group?
At least 75% direct
51% indirect
Can only be in one group
When is gift relief allowed?
What is the proforma?
- unquoted trading company
- either a complete gift
- less than MV (if money involved)
Proceeds (MV) Cost Chargeable gain Gift relief (balancing figure) Gain (actual proceeds - original cost)
What is the criteria for ER?
Five >5%
Trading co
Twelve (12m) owned
Work there
Rates taxed at 10%
Still treat it as taxable income when knowing what to tax non-ER gains
What share relief is applicable for each tax?
IHT
BPR
CGT
GIFT RELIEF
ER
CO = CHARGEABLE GAIN
SSE
What to do with disposals for CAs?
Lower of proceeds and cost
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
If you are a tenant and doing your trade adjustments, do you get a trade deduction?
Yes. Comes off cost if doing gain
Property income of landlord (premium X %rent X years used/total no of years)
As a landlord, what is your trade deduction in corporation tax?
Premium X %income (H43) X for one year X any time apportionment
How are patent royalties or other intangibles treated?
A) company
B) sole trader
A) no adjustment
B) 20% is paid to HMRC
Gross up and add as an extra trade deduction
When doing Test 3 for recoverability of VAT, how do you work out the % for non-attributable input VAT?
Taxable sales/total sales
Needs to be VAT-exclusive and round up to the next %
Is stamp duty applicable on VAT inclusive or exclusive prices?
VAT inclusive
For lease premium, where do you look for rates and where is Hardman wrong?
Same place as land
1% although H says 0%
When
1) non-residential
2) rent >1000 pa
What is fall in value relief?
1) if sold at death < less than MV at gift
2) if still held < original MV at gift
Deduct from gift in P2 ONLY
For inheritance tax, what assets do you include in the free estate?
1) UK-domiciled
2) non-UK domiciled
Assets held at death
A) UK Dom = W/w assets
B) Non-UK Dom = UK assets
In inheritance tax, what do you deduct from nil rate band at
A) lifetime inheritance tax
B) death inheritance tax
C) death estate
GCT = net CLT + donor paid IHT
A&B) less any GCTs 7 years before gift
C) less any GCTs 7 years before death
What can you not claim input tax on always?
A) no blocked VAT - any private use eg company cars, UK client entertaining
B) wages and dividends
What to do with fuel scale charge and fuel expenses ?
Recover all fuel expenses
Put fuel scale charges VAT in output tax
What is the calculation for CApital goods scheme for when taxable use changes?
%now - %original X total input VAT paid/5 or 10 (depends on what it is)
More taxable use - recover more from HMRC
Less taxable use - repay more to HMRC
In 1st year, state what can be recovered and not recovered
Tell me the VAT rules for
A) Sales to EU
B) Sales to non-EU
C) Services to overseas (EU and non-EU)
A) No VAT registration - 20%
VAT registration - 0%
B) Sales to non-EU - 0% (different VAT rules)
C) EU rules -
Overseas customer with VAT - rather than 0% (under EU rules) = exempt supply (cannot recover input tax)
Tell me the VAT rules for
Purchase for non EU
Purchase for EU
Purchase for non EU - 20%
Purchase for EU - VAT neutral - need to put in both output and input to net of 0
When do you think of partial exemption tests?
When you have purchases that relate to exempt supplies or general expenses that cannot be attributable to supplies
What are the VAT implications for selling/constructing a new commercial building or old commercial with option to tax?
Work on it
New commercial building (less than 3 years old)
Charge 20% output tax
Recover any input tax (on /materials etc)
For old commercial buildings:
- can’t recover input tax when selling it
- can charge VAT on rent and later sale
For class 1b NIC, under PSA, what is the unique difference with gifts to employees from employers?
Gross up gift dependent on whether basic, higher or additional rate
What is the QSR formula?
Tax paid on chargeable estate X net transfer*/chargeable estate
*what is person receiving
When it’s specific gift (specific legatee) = gross
Residual legatee (remainder of death estate) = gross - tax
How to use the rent a room allowance?
For property income - Lower of Income less RAR (4250) Or Income less allowable expenses
What are the criterion and implications for marriage allowance?
Transferor must have <10600 of taxable income
Recipient must be a BR taxpayer
Will have normal PA
Will be taken off tax liability ie 20% X 1060 = 212
How to restrict MCA?
If old and rich and have MCA, restrict it by taking the excess off 8355 then multiply by 10%(which is taken off tax liability)
What is the calculation for transfer of a gift?
Higher of
MV when gift given to you
And
Original value - less benefits to date
What is childcare vouchers worked out on (for external childcare)?
Childcare is worked out on taxable EI (after PA)
Employer-provided childcare - exempt
What value is stamp duty worked out on?
The actual cost to you
What are the rules for slabbing?
Only residential properties post-2014
How do we treat lease costs and emissions for cash basis?
Don’t care
What is the criteria for a loss relief group?
<75% direct
<75% indirect; subsidiaries
Can be in more than one group
What is the criterion for a gains group?
At least 75% direct
51% indirect
Can only be in one group
When is gift relief allowed?
What is the proforma?
- unquoted trading company
- either a complete gift
- less than MV (if money involved)
Proceeds (MV) Cost Chargeable gain Gift relief (balancing figure) Gain (actual proceeds - original cost)
What is the criteria for ER?
Five >5%
Trading co
Twelve (12m) owned
Work there
Rates taxed at 10%
Still treat it as taxable income when knowing what to tax non-ER gains
What share relief is applicable for each tax?
IHT
BPR
CGT
GIFT RELIEF
ER
CO = CHARGEABLE GAIN
SSE
What to do with disposals for CAs?
Lower of proceeds and cost
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
If you are a tenant and doing your trade adjustments, do you get a trade deduction?
Yes. Comes off cost if doing gain
Property income of landlord (premium X %rent X years used/total no of years)
As a landlord, what is your trade deduction in corporation tax?
Premium X %income (H43) X for one year X any time apportionment
How are patent royalties or other intangibles treated?
A) company
B) sole trader
A) no adjustment
B) 20% is paid to HMRC
Gross up and add as an extra trade deduction
When doing Test 3 for recoverability of VAT, how do you work out the % for non-attributable input VAT?
Taxable sales/total sales
Needs to be VAT-exclusive and round up to the next %
Is stamp duty applicable on VAT inclusive or exclusive prices?
VAT inclusive
For lease premium, where do you look for rates and where is Hardman wrong?
Same place as land
1% although H says 0%
When
1) non-residential
2) rent >1000 pa
What is fall in value relief?
1) if sold at death < less than MV at gift
2) if still held < original MV at gift
Deduct from gift in P2 ONLY
For inheritance tax, what assets do you include in the free estate?
1) UK-domiciled
2) non-UK domiciled
Assets held at death
A) UK Dom = W/w assets
B) Non-UK Dom = UK assets
In inheritance tax, what do you deduct from nil rate band at
A) lifetime inheritance tax
B) death inheritance tax
C) death estate
GCT = net CLT + donor paid IHT
A&B) less any GCTs 7 years before gift
C) less any GCTs 7 years before death
What can you not claim input tax on always?
A) no blocked VAT - any private use eg company cars, UK client entertaining
B) wages and dividends
What to do with fuel scale charge and fuel expenses ?
Recover all fuel expenses
Put fuel scale charges VAT in output tax
What is the calculation for CApital goods scheme for when taxable use changes?
%now - %original X total input VAT paid/5 or 10 (depends on what it is)
More taxable use - recover more from HMRC
Less taxable use - repay more to HMRC
In 1st year, state what can be recovered and not recovered
Tell me the VAT rules for
A) Sales to EU
B) Sales to non-EU
C) Services to overseas (EU and non-EU)
A) No VAT registration - 20%
VAT registration - 0%
B) Sales to non-EU - 0% (different VAT rules)
C) EU rules -
Overseas customer with VAT - rather than 0% (under EU rules) = exempt supply (cannot recover input tax)
Tell me the VAT rules for
Purchase for non EU
Purchase for EU
Purchase for non EU - 20%
Purchase for EU - VAT neutral - need to put in both output and input to net of 0
When do you think of partial exemption tests?
When you have purchases that relate to exempt supplies or general expenses that cannot be attributable to supplies
What are the VAT implications for selling/constructing a new commercial building or old commercial with option to tax?
Work on it
New commercial building (less than 3 years old)
Charge 20% output tax
Recover any input tax (on /materials etc)
For old commercial buildings:
- can’t recover input tax when selling it
- can charge VAT on rent and later sale
For class 1b NIC, under PSA, what is the unique difference with gifts to employees from employers?
Gross up gift dependent on whether basic, higher or additional rate
What is the QSR formula?
Tax paid on chargeable estate X net transfer*/chargeable estate
*what is person receiving
When it’s specific gift (specific legatee) = gross
Residual legatee (remainder of death estate) = gross - tax
How to use the rent a room allowance?
For property income - Lower of Income less RAR (4250) Or Income less allowable expenses
What are the criterion and implications for marriage allowance?
Transferor must have <10600 of taxable income
Recipient must be a BR taxpayer
Will have normal PA
Will be taken off tax liability ie 20% X 1060 = 212
How to restrict MCA?
If old and rich and have MCA, restrict it by taking the excess off 8355 then multiply by 10%(which is taken off tax liability)
What is the calculation for transfer of a gift?
Higher of
MV when gift given to you
And
Original value - less benefits to date
What is childcare vouchers worked out on (for external childcare)?
Childcare is worked out on taxable EI (after PA)
Employer-provided childcare - exempt
What value is stamp duty worked out on?
The actual cost to you
What are the rules for slabbing?
Only residential properties post-2014
How do we treat lease costs and emissions for cash basis?
Don’t care
What is the criteria for a loss relief group?
<75% direct
<75% indirect; subsidiaries
Can be in more than one group
What is the criterion for a gains group?
At least 75% direct
51% indirect
Can only be in one group
When is gift relief allowed?
What is the proforma?
- unquoted trading company
- either a complete gift
- less than MV (if money involved)
Proceeds (MV) Cost Chargeable gain Gift relief (balancing figure) Gain (actual proceeds - original cost)
What is the criteria for ER?
Five >5%
Trading co
Twelve (12m) owned
Work there
Rates taxed at 10%
Still treat it as taxable income when knowing what to tax non-ER gains
What share relief is applicable for each tax?
IHT
BPR
CGT
GIFT RELIEF
ER
CO = CHARGEABLE GAIN
SSE
What to do with disposals for CAs?
Lower of proceeds and cost
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
Are dividends received taxed in corporation tax?
No
How to work out transfer benefit?
Higher of
- Current market value
- Original value less use benefits since purchased
What are the 4 steps for change of accounting date?
1) identify tax year of change
Earlier of
- new date
- old date + 12m
2) CYB* before and after YOC
*CYB = 12m set of accounts that end in tax year
3) GAP between (2) - end of year and beginning of 2nd year
4) GET GAP TO 12m
12m+ - deduct ? months off overlap profits
<12m - use profits from PY
When to use VAT inclusive or exclusive amount?
VAT exclusive when recoverable, VAT inclusive if not recoverable as that is the real cost to them(think about when I pay something vs when Azam Solicitors does)
100% business use on cars = recoverable
What is the expected life of short life (‘depooled’) assets before moving them to MP?
Post-April 2011 - 8 years
Pre-April 2011 - 4 years
What assets cannot receive depooling elections?
- car
- assets with private use
- special rate expenditure
What specific expenses can be deducted from rental income?
Expenses regarding finding tenants
- bad debts written off
- advertising
- accountants fees
- agents fees
What expenses need to be apportioned re property income?
All expenses that are owners expenses eg council tax, insurance, repairs - only deduct in periods when house is available for letting
When is wear and tear allowance permitted and what is the formula?
Permitted in furnished property
10% X [Rent - (water rates and tax) x a/52]
A = no. Of weeks property is available for letting
What NTLR income and expense can be put in corporation tax comp?
ALL INTEREST INCOME Interest expense = 3 1) on late paid CT 2) on loan to buy investment property 3) on loan to buy shares
What is the corp tax pro forma?
Trading income Property income NTLR relationships Misc income Chargeable gains TOTAL PROFITS Less qualifying donations (paid in cash) TTP (taxable total profits) Less group relief REVISED TTP
What to do with transfer of life assurance policies of:
1) dead person is covered by policy or
2) someone else
Dead person
A) written in trust - NOTHING
B) not written in trust - proceeds
Someone else - MARKET VALUE (as transferring the policy)
What is the annual exemption for CGT for trustees?
One half of individuals
5550/no. Trusts of settlor
MIN 1110
What gifts are exempt on death estate and lifetime gifts?
- transfer to spouse/civil partner (unless non-domiciled - restriction)
- gifts to charities
- gifts to political parties
How to calculate profit when sale of a short lease from short lease?
Proceeds (full premium) x Cost x (s - x)/y
Less property income
(Sublease removal and headlease removal apportioned to sublease)
Yestosex
Y(1) - original lease granted
S(2) - original lease - date of sublease granted
X(3) - date sublease eXpired
What can be deducted in trading income re: pension contributions?
Deductible if paid (if accrued at year end - add it back)
When can salaries and bonuses be deducted in trading income?
Normally can be deducted
But 9 months after year end (if including payment dates)
For inheritance tax, what assets are included in the death estate then
A) Non-UK domiciled
B) UK domiciled
A) UK assets
Make sure check deemed UK residence - 17 out of 20 years
B) W/W assets
What is the proforma for disposal of home?
Proceeds Cost GAIN PPR = gain x occupation/ownership (X) Letting relief (X)
How to calculate letting relief?
Lower of
PPR - 40,000
Letting gain - gain X (months let that don’t get PPR)/ownership
