3 - introduction to income tax Flashcards
what are two examples of exempt income
ISAs and premium bonds
how much is the personal allowance
12570
what is the adjustement to PA after what limit
after 100,000 of ANI, PA is reduced by £1 for every £2 over
what is the order for calculating income tax
NSI, then savings, then dividends
what are the bands for NSI
up to 37700 basic rate 20%
up to 150000 higher rate %40
over 150000 additional rate 45%
how does the savings starting rate band work
applies to people with non savings income of no more than 5000 after PA
what is the PSA
personal savings amount, either 1000, 500 or nil depending on whether they are a basic, higher or additional rate taxpayer this amount is then 0%
what is the amount of nil rate band for dividends
2000
what are the two conditions that must be satisfied for gift aid
- the donor must give the charity a gift aid declaration normally in writing
- the donor must pay an amount of income tax or CGT which is equial to the amount the charity will reclaim in the tax year
what do you multiply pensions or charitable donations by
1.25
how much can be transferred with marraige allowance
1260
what are the conditions for the transferor and the receipient with a marriage allowance
the transferor must either have no liability or be only a basic rate payer
the recepient must be a basic rate taxpyaer
how does the marriage allowance work
as an overall tax reducer, applied last
