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TX Accumulated Knowledge > B Section C Theory Rote > Flashcards

B Section C Theory Rote Flashcards

1
Q

How can loss relief be made (past years)

A

A claim may be made in either year in isolation, or both years in any order

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2
Q

How is loss relief restricted in each year (past years)

A

To lower of total income or loss

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3
Q

How is loss relief restricted in each year (current and future years)

A

Relief can be used for the whole or loss remaining unrelieved after claims against total income

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4
Q

Time limit for claim against total income

A

First anniversary of the end of the tax year of loss

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5
Q

What is the time relief for a terminal loss relief claim?

A

Within four years of the end of the last tax year of trading

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6
Q

How much PA can be transferred to a spouse?

A

£1260 or 10% of PA

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7
Q

Penalities on balancing payment for late payment?

A

One month late

Six months late

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8
Q

If employee is treated as employed in respect of contract? (In relation to PAYE)

A

Company required to deduct tax under PAYE every time

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9
Q

Advantage of furnished holiday lettings (restriction)

A

No restriction on finance cost

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10
Q

Advantage of furnished holiday lettings (allowable)

A

The cost of furniture purchased for use in furnished holiday letting will be an allowable expense under cash basis

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11
Q

Advantage of furnished holiday lettings (relevanmt)

A

Furnished holiday letting will qualify as relevant earnings for pension tax relief purposes

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12
Q

What is done with a P45?

A

Provided by employer to employee. Then employee gives to new employer

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13
Q

What is subject matter in badges of trade?

A

Some assets commonly held as investments for their intrinsic value

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14
Q

What is length of ownership in badges of trade?

A

If item purchased are sold soon afterwards, this indicates trading transactions

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15
Q

What is frequency of transactions in badges of trade?

A

Multiple transactions will be interpreted as trading transactions where their frequency indicates the carrying on of a trade

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16
Q

What is work done in badges of trade?

A

When work is done to make an asset more marketable. This is likely indicative of trading

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17
Q

What is circumstances of realisation in badges of trade?

A

A forced sale is not likely to be treated as trading

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18
Q

What is motive in badges of trade?

A

Presence of profit is a strong indication that a person is trading

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19
Q

Signs of employment (long time)

A

COntract is for relatively long time

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20
Q

Signs of employment (control)

A

Company exercises control through weekly meetings

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21
Q

Signs of employment (significant expenses)

A

No significant expenses incurred by employee

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22
Q

Signs of employment (only working)

A

Employee is only working for that company

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23
Q

Relevant NIC for employed?

A

Class 1

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24
Q

Relevant NIC for self-employed?

A

Class 2 and 4

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25
Q

When can HMRC carry out a compliance check?

A

Regards the completeness and accuracy of any return (e.g. undeclared income)

26
Q

Which residency test is carried out first?

A

The automatic non-resident test

27
Q

Which residency test is carried out second?

A

Automatic UK resident test

28
Q

Which residency test is carried out last?

A

Substantive tests

29
Q

When is an employer required to submit a full payment submission to HMRC?

A

Every time a payroll payment is made. The electronic submission should be made on or before the time of the payroll payment

30
Q

What does the final FPS include?

A

Year-end accumulations for employees

31
Q

What is iXBRL for?

A

The standardised way accounts and computations may be electronically tagged

32
Q

When is iXBRL a mandatory presentation?

A

For submissions accompanying the online filing of form CT600 by companies

33
Q

When is iXBRL not a requirement?

A

For unincorporated businesses

34
Q

What does Form P11D detail?

A

Expenses and benefits provided

35
Q

When is the time limit for establishing loss relief?

A

Four years after the end of the tax year of loss

36
Q

When is the time limit for establishing terminal loss relief?

A

Within four years of the end of the last tax year of trading

37
Q

When a claim against total income is made first?

A

A trading loss can be set against the chargeable gains of the same and/or preceding tax year

38
Q

When must the trading loss to be set off against chargeable gains be relieved?

A

After deducting current year capital losses, but before deducting unrelieved capital losses brought forward from earlier tax years and AEA

39
Q

Factors to be considered for loss relief (rate)

A

Rate of relief

40
Q

Factors to be considered for loss relief (capital allowance)

A

Amount of loss and ability to adjust this by restricting capital allowance claim

41
Q

Factors to be considered for loss relief (restriction)

A

Effect of £50,000/25% loss relief restriction

42
Q

Factors to be considered for loss relief (chargeable)

A

Amount of chargeable gains available for relief

43
Q

Factors to be considered for loss relief (succession)

A

Current year

Prior year (and two preceding years in the case of commencement losses)

Expectations of future trading profits.

44
Q

How is a terminal loss relieved?

A

On a LIFO basis against the trading profits only of the same business for the tax year of cessation and the three tax years preceding that year.

45
Q

How much personal allowanc can be transferred to a spouse?

A

10% of his personal allowance

46
Q

When profits are withdrawn as dividends (NICs)?

A

There is no class 1 NIC

47
Q

When is there no corporation tax liability for a new company?

A

If profits are entirely withdrawn as director’s renumeration

48
Q

Another way to calculate employer’s Class 1 NIC?

A

Taxable total profits - director’s renumeration

49
Q

Interest relief in FHL vs not FHL?

A

Not FHL: Is a tax reducer

FHL: Is allowable

50
Q

Factors that affect choice of loss relief (timing of relief)

A

Claim against general income/capital gains in current or preceding years in earlier relief than a carry forward claim against future trading profits

51
Q

Does job-related accomodation have a taxable benefit?

A

NO

52
Q

How to calculate maximum contribution that qualifies for tax relief?

A

Trading profit - pension contribution

53
Q

What is iXBRL used for?

A

The standard way that accounts and computations are electronically tagged

54
Q

When is iXBRL mandatory?

A

Submissions accompanying the online filing of form CT600 by companies

55
Q

What does form P11D contain?

A

Expenses and benefits provided

56
Q

Is form P60 and P11D provided to employees?

A

YES

57
Q

How is child benefit income tax charge collected?

A

Through self-assessment system

58
Q

If a person makes lifetime gifts even when such gifts are made within seven years of death. Advantage (taper relief)

A

Taper relief will reduce the amount of IHT payable after 3 years

59
Q

If a person makes lifetime gifts even when such gifts are made within seven years of death. Advantage (fixed)

A

Value of PETs and CLTs are fixed at the time they are made

60
Q

When is iXBRL mandatory?

A

For submissions accompanying the online filing of form CT600 by companies

61
Q

Maximum contribution which qualifies for tax relief in pensions calculation?

A

Relevant earnings - contributions already made

62
Q

What is an example of a no gain/no loss disposal?

A

DIsposal of a chargeable asset between a husband and wife

TX Accumulated Knowledge (35 decks)

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