BT - Calculating the Income Tax Liability

Question 1

Income Tax

Taxable Income is Calculated as:

Answer 1

Total Income
Less:
Deductible Payments
Personal Allowance

Question 2

Income Tax

Taxable Social Security Benefits Include:

Answer 2

• The State Pension;
• Any Jobseeker’s Allowances.

Question 3

Calculating the Tax Liabilty

Deductible Payments Include:

Answer 3

• Trading Losses;
• Interest Paid on Qualifying Loans;
• Post-Cessation Expenses.

Question 4

Calculating the Tax Liabilty

The Total Amount Deductible is The Greater of:

Answer 4

• £50,000; or
• 25% of Adjusted Total Income.

Most Likely an Issue With Trading Loss Relief

“Adjusted Total Income” Generally Being:
Total Income - Gross PPCs

Question 5

Calculating the Tax Liabilty

When is The Personal Allowance Restricted?

Answer 5

Where Net Income Exceeds £100,000.

Reduced by 1/2 The Excess.

Question 6

Calculating the Tax Liabilty

What is Tax Paid at Source Deducted to Find?

Answer 6

The Tax Due or Repayable for the Year.

Question 7

The Taxation of Interest

What Does The Level of Savings Allowance Depend on?

Answer 7

The Individual’s Marginal Rate of Tax.

Question 8

Investment Income

What is The Dividend £Nil Rate For 24/25?

Answer 8

£500.

Available to Any Taxpayer.