1 - Income Tax (J) Flashcards
J Income tax and families
What is the main impact of taxation on marriage or civil partnership?
IHT and CGT
Children, regardless of age, are taxed in the same way as adults, and also have some of same personal allowances. True of false?
True - but not often relevant because they nearly always have zero earnings.
Is pocket money taxable?
No! Not classed as income.
Who is taxed on interest earned from an account set up by an adult, and invested into by the adult, for a child?
Adult
What is the maximum investment amount for a JISA per tax year?
£9,000 per tax year
What is the low income exemption for taxation of children’s income and when does it apply?
If income less than £100, from investments made by same parent, income is treated as the childs, not the parents
Joe, an additional-rate taxpayer, puts some money into a building society account for his
five-year-old son, Peter. In the first year, the income this generates is £95. Who’s income is this deemed to belong to?
Peter, due to low income exemption
(When the child’s income from all investments made by the same parent is not more than £100, the rule is ignored and the income treated as that of the child)
What are the 2023/24 child benefit rates?
£24.00 a week for the first child and £15.90 a week for each subsequent child
At what amount of earnings does the high income child benefit charge apply and when is the benefit effectively lost completely and why?
Net adjusted income £50,000
£60,000 lost due to tapering between these 2 amounts
What is the amount of tax applied on child benefit?
None, if net adjusted income is less than £50,000, it’s tax-free
If both parents earn over £50,000, who is he high income child benefit tax applied on?
Higher earner
