9 Taxation, Investment Wrappers And Trusts

Question 1

Stamp duty

Answer 1

Stamp duty reserve tax
Buy shares electronically. 0.5% purchase price.
None on etf, oiec, unit trust, most foreign shares, bonds

Stamp duty land tax
Additional 3% second home. Additional 2% non uk residents

Question 2

Vat

Answer 2

Chargeae when turnover exceeds threshold
Standard rate 20%
Exception brokers commission for execution of stock market trade

Question 3

Corporation tax

Answer 3

On adjusted earnings

Question 4

Inheritance tax

Answer 4

Individual nil band 325K transferable to spouse
Transfers in excess of nil band 40%
Residence nil rate band (leave house to children or grandchildren) 175K

Exemptions: spouse, registered charity, 7 years prior

10% to charity reduces 40%to 36%

Question 5

Capital gains tax

Answer 5

Applies when

• dispose (sell, exchange, give away) asset
• receive capital sum eg insurance payout for damaged asset

Applies to eg
Certain Bonds, shares, unit trusts, non main home property

Exemptions
Main home
Car, possessions up to 6k
Gilts and qualifying corporate bonds
ISAs, approved pension
Betting , lottery pools
Transfers between spouses

Annual exempt amount 
10 or 20 % individuals 
18 or 28% residential property 
20% trustees
10% entrepreneurs relief

Question 6

Dividends

Answer 6

Part of income tax
Allowance 2k
7.5 basic rate
32.5 higher rate
38.1 additional

Question 7

Residency

Answer 7

Automatically uk tax resident

• 183 days per year uk
• oy home in UK and owned/rented lived 91 days and been in it at least 30

Non resident

• less 16 days uk (46 if not uk resident for 3 years)
• ft job abroad, fewer than 91 days in UK, 30 spent working