3 Property and Investment Income Flashcards
What are other types of sources of saving income other than bank interest?
Interest from NS&I, Interest from gilt-edged securities, interest from quoted company loan stock
What type of savings interest is exempt?
ISAs and NS&I
What is the starting rate of tax for taxpayers whose savings income falls into the first X of taxable income?
0% for the first £5,000
What is the saving income nil rate band for basic rate taxpayers?
£1,000
What is the saving income nil rate band for additional rate taxpayers?
£Nil
What is the procedure to applying the appropriate rate of tax to savings income?
- Calculate income tax on non savings income
- Apply the different rates of tax a. Starting rate, b. savings nil rate band c. normal rates
- Normal rates
What is the dividend nil rate band?
£5,000
What is the dividend rate for basic rate?
7.5%
What is the dividend rate for higher rate?
32.5%
What is the dividend rate for additional rate?
38.1%
Under what conditions must an expense be deductible for rental businesses?
To be allowable, the expenses must have been incurred wholly and exclusively for the purposes of the property business.
What is a irrecoverable debt called in regards to rental property?
Impairment Loss
What type of expenditure is not allowable in rental properties?
Improvement expenditure
What is the saving income nil rate band for higher rate taxpayers?
£500
What does premium mean in relation to short leases?
A premium is a lump sum payment made by the tenant to the landlord in consideration for the granting of a lease.
What does grant mean in relation to short leases?
The grant of a lease is where the owner of a property gives the tenant the exclusive right to use the property for a fixed period of time.
What is a short lease?
A short lease is a lease for a period of less than or equal to 50 years.
What is the assessable amount on property income on short leases?
Premium - Less:Premium x 2% x (length of lease - number of complete years)
What is the alternative formula for short term leases premium?
Premium x (51-length of lease)/50
What are the conditions for a property to be classed as a furnished holiday letting? (4)
- Let furnished
- On a commercial basis with a view to the realisation of profits
- Available for commercial letting for 210 days a year
- Be actually let for 105 days of the year, excluding long term occupation
What period of time is long term occupation in relation to furnished holiday lettings?
31 consecutive days
If a tenant comes back for long terms of occupation for furnished holiday lettings, what must this not exceed?
155 days
Can you offset holiday lettings against other rental income?
No
What is the amount for rent a room allowance?
£7,500
What is the ISA allowance for 2016/17?
£15,240
How old do you have to be to have a savings ISA?
16 years or older
How old do you have to be to have a stocks and shares ISA?
18 years or older
What tax reliefs do ISA’s offer?
Income is exempt, and disposals of investments within a ISA are tax exempt from CGT
MAKE NOTES ON SECTION8
MAKE NOTES ON SECTION 8
