Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

TC > TC Summary > Flashcards

TC Summary Flashcards

(66 cards)

Start Studying
1
Q

VAT - What are the conditions for VAT Groups?

A
  • Each company has a fixed establishment in the UK
  • One company controls each other company >50%
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

VAT - Why would some individual entities choose not to join a VAT Group?

A

Entities making zero-rated supplies will choose to submit monthly VAT returns and receive regular cash repayments from HMRC rather than lose the cashflow advantage by netting off the repayment against other group liabilities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

VAT - Benefits of VAT Groups

A
  • No VAT charged on intra-group supplies
  • Only one VAT return required.
  • Small exempt entities may be able to recover input VAT under de minimis partial exemption rules.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

VAT - Disadvantages of VAT Groups

A
  • All entities jointly and severally liable for group VAT liability.
  • Admin difficulties with collecting all entity info.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

VAT - What are the ‘de minimis’ rules?

A

Test 1:
- Total input tax ≤ £625 per month average.
- Exempt supplies ≤ 50% of all supplies (exclude VAT).

Test 2:
- Total input tax less input tax from taxable supplies ≤ £625 per month average.
- Exempt supplies ≤ 50% of all supplies (exclude VAT).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

VAT - Partial Exemption Non-attributable input VAT calc.

A

(Total taxable supplies / total supplies)*Non-attributable input VAT.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

VAT - Partial Exemption - Things to look out for

A
  • Apportionment between taxable and exempt is rounded up to %.
  • VAT figures usually given per quarter therefore exempt supplies should be /3 not 12 for de minimis limits.
  • Annual adjustments to input VAT recovered using partial exemption.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

VAT - What residential property transactions are zero-rated?

A
  • Construction or sale of new residential building
  • Lease exceeding 21 years on new residential property
  • Sale of newly converted residential property from non-residential if done by the converter.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

VAT - What residential property transactions are standard-rated?

A

Work on existing residential building

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

VAT - What residential property transactions are reduced-rated?

A
  • Renovation of dwellings empty for 2 years+
  • Conversion of residential into different number of dwellings
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

VAT - What residential property transactions are exempt?

A
  • Sale of old residential building
  • Most leases of residential buildings
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

VAT - What commercial property transactions are standard-rated?

A
  • Construction or sale of new commercial building
  • Work on existing commercial building
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

VAT - What commercial property transactions are exempt?

A
  • Sale of old commercial buildings
  • Lease of any commercial building
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

VAT - Option To Tax

A
  • Business can change their mind within 6 months of OTT providing they have not put it into practice.
  • An OTT will automatically be revoked once the person who opted to tax has held no interest in that property for 6 years.
  • Otherwise the OTT may be revoked after 20 years with the consent of HMRC.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

VAT - What are the registration and de-registration limits for the flat rate scheme?

A
  • Register at £150k turnover (excl. VAT + exempt)
  • De-register at £230k turnover (incl. VAT + exempt)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

VAT - Capital goods scheme formula

A

(Total input VAT/10 or 5 yrs) * (taxable % use now - original taxable % use)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

When is SDLT not chargeable on lease premium?

A
  • Lease term of a dwelling for less than 7 years.
  • Lease of a dwelling for between 7-21 yrs where avg. annual rent >£1000
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Corporation Tax - What is SSE?

A

Substantial Shareholding Exemption - no chargeable gain arises on disposal out of a substantial shareholding in a trading company.

  • Holding of 10%+ for continuous period of 12 months in 6yr prior to disposal.
  • Trading company
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

CT - What companies have to pay in instalments and when is this due?

A

Large companies (AP over £1.5m for 12month period).

14th day of 7th, 10th, 13th and 16th month after start of period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

CT - When is CT due to be paid?

A

9 months and 1 day after accounting period end

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

CT - What tax groups can be formed and what are the required shareholdings of each?

A

Loss relief groups:

75% direct and 75% indirect holding.

Gains groups:

75% direct and 50% indirect holding.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

CT - Formula for Marginal relief

A

= (U-A) x (N/A) x SF

U: Upper limit
A: Augmented profits
N: Taxable profits
SF: Standard fraction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

CT - What are augmented profits?

A

TTP + dividends received from non-related companies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

CT - How does the RDEC work?

A

Add back 20% of qualifying expenditure to trading profits and the same figure is credited off the tax liability.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
CT - When does a de-grouping charge apply
When a company that received a NGNL asset leaves the group within 6 years of the transfer
26
Income Tax - How do you treat occupational pension scheme contributions vs PPS?
OPS - deduct from employment income PPS - extend BRB or HRB if individual is a HRTP or ARTP respectively.
27
Income Tax - When must the accruals basis for property income be used?
If receipts > £150,000 p.a.
28
Income tax - What are the £1000 property receipts rules?
Receipts < £1000 make property income exempt. Receipts > £1000, tax the lower of normal tax calc. & receipts less £1000
29
Income Tax - What is rent a room relief?
If an individual lets out a room in their main residence with gross income < £7500, it is exempt. If > £7500, they can choose whether to deduct the normal allowable expenses or £7500 for the lowest taxable amount.
30
Income Tax - how are finance costs on property income treated?
Not allowable deductions from property income but get a 20% relief after tax is calculated.
31
Income Tax - What are the main classes of NICs and what are they for?
Class 1 primary - employee Class 1 secondary - employer Class 1A - employer on BIK Class 1B - PAYE settlement agreement, employer pays income tax and NIC Class 4 - self employed individuals
32
Income Tax - What is the NIC employment allowance and it's conditions?
£5000 per employer Not available to companies with Class 1 secondary liability of > £100,000 in previous tax year.
33
Income Tax - How much relocation costs are exempt?
£8000
34
Income Tax - How is loan interest benefit calculated.
Loans up to £10k exempt. Anything over this, whole amount of interest benefit is taxable. Only amount over official rate (2.25%) is BIK.
35
Income Tax - What is the van benefit and the fuel benefit for vans?
Set amount of £3960 Fuel benefit £757
36
Income tax - What is the car benefit and the fuel benefit for cars?
List price x CO2 emissions %. Fuel benefit is £27,800 x CO2 emissions %.
37
Income Tax - How is the accommodation benefit calculated?
Employer owns: Rateable value + extra charge (Cost - £75,000) x 2.25%. Employer rents: Higher of, rateable value and rent paid by employer
38
Income Tax - How are asset use benefits calculated?
Employer owns: MV when provided x 20%. Employer rents: Higher of MV when provided x 20%, and rent paid by employer.
39
Income Tax - How is child benefit tax charge calculated?
ANI < £60k = no charge ANI > £80k = charge full child benefit ANI between limits = charge at 1% per £200 benefit received.
40
Income Tax - What is adjusted net income (ANI)?
= Net income - gross Gift Aid - gross personal pension scheme contributions.
41
Trading Income - Is trading income recognised over the accounting period or tax year?
Tax year
42
Trading income - What are the two main differences in cash vs accruals basis?
The cash basis allows lease payments for high emission cars to be full allowed. Accruals basis disallows 15% of the payment amount. Capital payments are claimed in the cash basis rather than capital allowances being claimed.
43
Trader Losses - What is terminal loss relief?
If there is a loss in the final 12 months of trade, the loss can be extended back for 3 years.
44
Trader losses - What is opening year relief?
A trade loss in the first 4 years of trade can be carried back 3 years on an all or nothing basis.
45
Trader losses - What is the CY/PY relief?
Losses in the CY can be set against total income for the CY and/or the PY on an all or nothing basis.
46
Trader Losses - What is the restriction on relief against non-trading income?
Higher of: - £50,000 - 25% of ANI
47
Individuals Overseas - What is the remittance basis and its effects?
- Only income/gains remitted to UK are taxable. - No personal allowance - No AEA - 7 of last 9 years resident has a charge of £30k - 12 of last 14 years resident has a charge of £60k.
48
Capital Gains - List all available reliefs
Rollover relief Holdover relief Gift relief BADR Investor's relief Private residence relief Letting relief
49
Capital Gains - How do SBAs affect gains?
Proceeds are increased by the value of SBAs claimed to date.
50
Capital Gains - How does rollover relief work?
Proceeds invested in 12 months prior to sale or 3 years after disposal get relief by delaying the gain and increasing the cost figure of the replacement asset. - Non depreciating assets
51
Capital Gains - What are the share matching rules for individuals?
1. Same day 2. Previous 30 days 3. Share pool value
52
Capital Gains - How does investor's relief work?
Selling unlisted shares in a trading company taxed solely at lower rate of 10% - Subscribed for after March 2016 - Held for min. 3 years - Not an employee or director - Lifetime limit £10m
53
Capital Gains - How does gift relief work?
Defers gain until sale by donee. Balancing figure of the difference in gains calculated on the actual transfer cost (lower) and the MV of the asset (higher).
54
Capital Gains - How does BADR work?
Gains solely taxed at 10% using up BRB. - Assets owned at least 2 years prior to disposal - Unincorporated trading business - Shares in personal trading co (min 5%) if also an employee - Lifetime limit £1m
55
Capital Gains - How does private residence relief work?
No gain on disposal of an individual's private residence. Exemption = Gain x deemed occupation / period of ownership
56
Capital Gains - How does letting relief work?
Owner lets part of their occupied property and gets relief at lower of: - PRR given - £40,000 - Gain remaining after PRR deducted
57
Capital Gains - How does holdover relief work?
When replacement asset is depreciating (<60 yrs life), defer gain until the earlier of: - Disposal of replacement asset - 10 years from replacement date - Date ceased to be used in trade
58
Company Gains - What are the share matching rules for companies?
1. Same day 2. Previous 9 days 3. Share pool value
59
Company Gains - What is the indexation allowance?
Indexation allowance increases the original cost of an asset to reflect inflation. =RPI movement % x cost
60
IHT - What are the marriage allowances?
Parent - £5k Grandparent - £2.5k Party to wedding - £2.5k Other - £1k
61
IHT - What is the residence nil rate band?
Given when property is passed down to direct descendants. £175,000 Death estates over £2m lose £1 of the band for every £2 above £2m.
62
IHT - When would the death tax rate change?
When qualifying charitable donations make up 10% of the net estate, 36% IHT is charged instead of 40%.
63
IHT - What is the effective tax rate on transfers into trusts with the donor vs trust paying?
Donor - 25% Trust - 20%
64
IHT - How is quick succession relief calculated?
= Tax charge on first transfer x (increase in transferee's estate / diminution of transferor's estate) x relevant %.
65
Income Tax - What is the living expenses benefit limit?
10% of employee's net earnings.
66
CT - How do you apply AIA and FYA?
AIA is 100% limited to £1m p.a. FYA is 100% unless AIA partly used, then 50%.

TC (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions