Week 3 Flashcards
(20 cards)
What might 3 ways new world retirement incomes differ from old world?
New world retirement incomes include ISA, bonds and pensions.
Give me three reasons why someone might use an ISA?
You can access them instantly, they can be tax efficient and free from tax withdrawals.
What are the different types of ISA?
ISA (cash and stock)
Junior ISA
Lifetime ISA
Help to buy ISA
what is an advantage to pension savings?
They are tax efficient
What does a good retirement pension have?
Pension, ISA, bonds and funds
What is income tax and its levels?
The more you earn, the more you pay. It goes basic, higher and additional.
What are 3 different income taxables can include?
Rental from property, dividends, life assurance policies, saving income (interest from banks) and employment.
CGT applies to what and is exempt to what?
Capital gains tax applies to sales and gifts, it does not apply to gifts to spouses.
CGT is payed upon death. True or false?
False, it is not paid on death, if inherited and asset is sold then it will be paid.
What 3 ways could exempt you from paying CGT?
Death, gift to spouse and charity.
What might you pay CGT on?
Stocks and shares, business assets and property which is not your primary residence
What are two ways CGT could be differed not including death?
Through hold over relief or buying shares in enterprise investment schemes (EIS)
How does holdover relief work in terms of when CGT is paid?
When you gift, holdover relief is used in that CGT will only be paid if they sell the asset.
Very roughly, how is CGT calculated, the idea behind it?
CGT is what the asset sells for vs how much it was purchased for.
What are the 3 methods HMRC uses to calculate CGT?
Same day rule where stocks bought and sold for a profit will be calculated and they will not look at stocks you already held, only what you done in that day
30 day rule is similar, except if you repurchased a sold stock within only 30 days
section 104 holdings includes everything except those in same day and the 30 day rule.
When do you report CGT if you were an individual on gains?
If for example you make more than
£3k on something like stocks or sell an asset for more than £50k
When do you report CGT if you were a trustee on gains?
If you make more than £1.5k or sell asset worth more than £50k
How long do you have to report and pay CGT?
Individuals and trustees have until 31st January following year. Property sales must be paid in 60 days.
Non residents of Uk must report CGT even if below the individual £3k and £50k and must report it to HMRC within 60 days.
You have 4 years to use critical losses to gain possible relief in future CGT tax?
Yes you can
