C Relief Qualifications Flashcards
Where can gift holdover relief be claimed?
On gifts of business assets
Conditions of gift holdover relief (the individual)?
DIsposal made to individual who is UK resident
Conditions of gift holdover relief (disposal is of)?
Business asset used in donor’s trade
Unquoted shares in trading company or quoted shares in a personal trading company
Where can rollover relief be used (old and new asset)
Old asset and new asset bought are both used in trade carried on by person claiming rollover relief
Where can rollover relief be used (class of assets)?
Land and buildings for purpose of trade
Fixed plant and machinery
Goodwill (individuals only)
Why is there no CGT on the chargeable asset transferred to a spouse?
As it is covered by the spouse exemption
Cuargeable business assets in gift holdover relief are?
Goodwill
Land and buildings
Plant and machinery (except cars)
Conditions for investor relief?
An unlisted trading company held continuously for three years and issued on or after 17 March 2016
Which assets qualify for BADR?
Goodwill
Freehold offices and warehouses used in a business
BADR relief acronym?
Five %
Trading company
Two years before disposal
Work there
Does investment property and investments qualify for BADR?
NO
P11D?
Expenses and benefits provided
6 July 2024
P60?
Taxable earnings, income tax deducted, tax code, etc
31 May 2024
Final real-time submission date?
19 May
Job-related accommodation in income tax computation?
EXEMPT
Does moveable plant and equipment qualify for rollover releif?
NO
When is a fixed penalty of £1000 applied? (corporation tax assessment)
When last two corporation tax is late
Should a company that largely makes zero rated supplies be included in a VAT group?
NO
Chargeable disposals of chattels cannot give rise to a CGT loss? (True/false)
False
Is output VAT payable the same in cash accounting?
YES
When asset is no longer in use for VAT?
No input VAT is claimed
When tax point for deposit is the date of payment?
No adjustment is required to output VAT
When a company is exempt from VAT?
Company cannot be registered for VAT
When will VAT default not be charged for a VAT underpayment?
Because separate disclosure of VAT underpayment was not required
Intergroup supplies in group VAT are disregarded?
YES
When can someone join the cash accounting scheme?
Up to date with VAT returns and VAT payments
How can a VAT underpayment be corrected?
Entering the amount on next VAT return
When is Making Tax Digital rules required?
When registered for VAT
Does partnership have to absorb VAT?
YES
What can flat rate scheme be used with?
The annual accounting scheme
What doesn’t qualify for SBA?
Cost of land
Planning permission
Fees
Stamp taxes
Residential property
Are pension contributions included in earnings for Class 4 NIC claculations?
NO
If Samwell spends 60 days in the UK when he was previously a resident, how many ties does he have?
Two ties
Partnership profits and liability?
Each partner is liable only for their own share of partnership profits.
A partner who has a trading loss for a tax year can choose whichever form of loss relief best suits his individual circumstances? (True or False)
True, they can choose which loss relief suits them best
Payment of corporation tax which are not large companies?
Nine months and one day after the end of the chargeable accounting period
Payment of corporation tax which are large companies?
Corporation tax is paid in instalments
Payment of corporation tax which are large companies? (Quarterly instalment months)
Instalments are made months 7, 10, 13 and 16
+
Instalments are due on 14
What are augmented profits for a parent company in corporation tax?
TTP + dividends from non-group companies (less than 51%)
Lifetime tax on a CLT made between 6 April and 30 September is payable on?
30 April following the end of the tax year
When can a company use both the cash accounting and annual accounting scheme?
Its expected taxable turnover for next 12 months does not exceed $1.35m
Does cash accounting affect input VAT?
NO
When is output VAT accounted for in cash accounting?
Two months later than at present
If Richard continues to trade without registering for VAT?
They will still have to pay outstanding VAT
When can a simplified invoice be issued?
VAT inclusive amount of £250
When is the basic tax point?
The date when the service is completed
When are BADR and gift holdover relief both available?
Disposal of the interest in the partnership but not on the shares
What happens to individuals who submit a tax return on time?
They are able to have their tax payable calculated by HMRC
Are trading loss brought included in a claim for current group relief?
NO
When is a sub-subsidiary included in a chargeable gains group?
If ultimate parent company’s effective interest is over 50%
Is b/f trading loss included in current period group relief?
NO
How is PAYE on employee bonuses calculated?
Using income tax rates
Whys is carry forward more preferable than current year?
For cash flow reasons
Can an individual AEA be transferred to a partner?
NO
Are partnerships entitled to same loss relief as sole traders?
YES
When questions ays £0.5 ordinary shares?
£0.50 is factored in when calculating the chargeable gain
Disposal of shares relief?
BADR
Dividends received treatment in corporation tax?
Exempt
Is loan interest receivable part of trading profits?
NO
Is building society interest part of trading profits?
NO
Interest payable treatment in corporation tax working depends on?
Whether it is for trade or non-trade purposes. If for trading purposes, it is deductible on a profit. Is a 0 on a loss (IN TRADING PROFIT WORKING)
Non-trade is deducted in other income
Who is provided with form P60?
Employees
Does real-time PAYE information need to be filed electroncially?
YES
Goodwill for rollover relief individual vs company?
Goodwill can be included for individual, but not for company
Employer’s duties?
Deduct correct income tax and NIC
Pay tax/NIC on due date which is 14 days from end of tax month
What must employer do when an employee leaves?
Fill out a P45
Standard benefit for private use of a company van?
£3960
When private fuel is privided for a company van?
£757 additional charge
Advantage of early trade loss relief?
Enables losses to be carried back for three years and so gives relief earlier than other loss reliefs
When must early trade loss relief be made?
By 31 January 2026 on a FIFO basis
Claim for terminal relief must be made by?
5 April 2028
Terminal relief timeframe?
Allows relief against trading profits on the three preceding years on a LIFO basis
What does the first tier tribunal deal with?
Straightforward cases
What is required for a VAT invoice to be valid?
Date of invoice
Total invoice price excluding VAT
Mortgage interest in a corporation tax working included in property business income for corporations?
NO
When is tax on CLTS made between 6 April and 30 September are due?
30 April
Why is it beneficial for all eligible compabies in a chargeable gains group to transfer assets to one company prior to disposal outside the group?
Transfers don’t give rise to any chargeable gain or capital loss
In corporation tax working, what figure is taxed at 25%?
The TTP (which is the figure that includes dividends from non-associated companies)
Automatic non-UK resident (16)
16 days
Automatic non-UK resident (45)
45 days and not previous resident
Automatic non-UK resident (91)
91 days and works full time overseas
Automatic UK resident (183)
At least 183 days in UK
Automatic UK resident (home)
Only home is in UK
Automatic UK resident (full-time)
Works full time in UK
Should name and address of customer be included on a detailed invoice?
Yes
Up to 15 days? (VAT)
No fixed penalty or daily penalty
When 4 VAT returns have been submitted late?
£200 fixed penalty is charged and continues to be charged
Is cash a chargeable disposal?
NO
Can AEA be transferred between people?
NO, unless higher rate person is transferring to basic rate
What VAT is charged on exported goods?
Input VAT
Is mileage allowance included in Class 1 NIC?
YES
Are false ceilings part of capital allowances?
NO
Is site clearance and demolition part of capital allowances?
NO
Are sewerage systems part of capital allowances?
NO
Is a balancing charge positive or negative?
Negative. Added to trading profit
Is a balancing allowance positive or negative?
Positive. Deducted from trading profit
What is meant by amount of premium assessed?
Premium received - 2% calculation
Divided by number of years to get the amount deductible
When is there no rollover relief?
Proceeds not reinvested are greater than the chamrgeable gain.
Small pool allowance?
Less than £1000
Where does the small gifts exemptions only apply?
To lifetime transfers
Can chargeable loss for shares go below 0?
NO
Chargeable gains and current period group relief difference in profit and loss?
Profit: Chargeable gains added
Loss: Chargeable gains are 0
Is a legacy to a friend included in the IHT calculation for a death estate?
No
When the tax point for the deposit is the date of payment?
No adjustment is required to the output VAT figure. This would have been included in output VAT
When VAT is a negative figure?
It is recoverable
If VAT sales are exempt?
No VAT is charged
If a customer pays for services before the basic tax point? When is the payment date?
The tax point
Do employer contributions count towards annual allowance?
No
What happens when tax-relievable pension contributions exceed annual allowance?
There is a charge to income tax
Implications for when a property is not expected to increase in value in the near future?
There is no inheritance tax benefit in making a lifetime gift
When to choose a IHT over CGT in a transfer?
As a transfer of IHT on death is an exempt disposal
Do pension contributions affect NIC?
NO
Who is responsible for paying tax on a cash gift to daughter?
The daughter
Who is responsible for paying a gift to property to a trust?
The trustees
Who is responsible for paying the death estate?
The personal representitves
Is mileage allowance time apportioned?
NO
Are dividends included in corporation tax working?
NO
When Percy survives for seven years (effect on inheritance tax liability)?
There is no additional inerhitance tax liability
How long can unused annual allowances be carried forward for?
Up to 3 years
When calculation is a savings calculation?
Use the simple calculation, don’t do a fuil computation
An import with no postponed accounting?
Input VAT is paid to HMRC
Does company need to provide up-to-date payments to qualify for annual accounting scheme?
YES
Can voluntary regristration allow partnership to recover VAT on its purchases?
NO
Where payment is received before the basic tax point?
The payment received date becomes the actual tax point
Benefit of VAT payments on account being based on previous year’s liability?
Improves budgeting and cash flow if business is expanding
When payment is received before the basic tax point?
Payment date becomes the tax point. Tax point is when service is completed
When is the basic tax point?
When service is completed
When can a less detailed invoice be issued?
When customer requests a VAT invoice
Does car benefit have NIC?
NO
How to calculate net income?
Salary - income tax liability - NIC
Is CGT charged on an inter-spouse transfer on a chargeable asset?
NO
When will HMRC notify about a compliance check?
Within 12 months of the actual filing date
Are there NICs on dividends?
NO
Consequence of VAT invoice not being issued within 14 days of a basic tax point?
VAT payable cannot be reduced
Is fuel part of Class 1A?
Yes
Is a company car part of Class 1A?
Yes
Why make gifts as early as possible?
PETs aren’t likely to become chargeable and CLTs only get 20% lifetime tax
Disadvantage of lifetime giving (transfer)?
Transfer shortly before death unlikely to achieve IHT saving. Should use CGT instead
Disadvantage of lifetime giving (right to use)?
Donor loses the right to use the asset, and any income derived from the asset
Why is it worth delaying the sale of an asset if it falls into the next tax year (CGT)?
So another AEA will be available
Does delaying the sale of an asset delay the CGT payable?
Yes, by a full year
When there are two corporation tax returns in a 15 month period?
They must be filed on the same day
Is the hire of office equipment treated as a business service or goods in VAT?
Business service
When is voluntary registration beneficial in terms of zero-rated supplies?
If he only makes zero-rated supplies and has input VAT to recover
Are all employers entitled to claim annual employment allowance?
No, as those who exceed £100000 aren’t eligible
Can a company choose to claim HMRC approved mileage rates instead of capital allowances?
FUCKING NO
When inheritance tax question says residence nil rate band? (potnetial way it can be restricted)
A private residence could be used to restrict the nil rate band
Flat rate scheme join then leave?
Exclude then include
When tax point for deposit is date of payment (VAT)?
No adjustment is required to the output VAT figure
If there’s already a gain that uses the AEA in a tax year?
May be better to delay making another gain until the next tax year
Why is it better to make a gain early in tax year for CGT?
It has longest gap between receiving proceeds and tax due
What is meant by deemed proceeds in an after spouse transfer in CGT?
The first cost figure
Why skip a generation for IHT?
This avoids a double charge for IHT
Why make gifts early in life (seven years)?
As it is likely donor will survive seven years after making it, thereby avoiding death tax on transfer.
Why make gifts early in life (three years)?
Taper relief can reduce the IHT liability
How to take advantage of RNRB?
Donor should consider making a will that leaves main residnce to direct descendants
What should happen with cash and shares in IHT?
Be given to other family members such as brothers and sisters
If Percy sold shares in Pergy Ltd to himself and gifted cash proceeds to Pudsey. What are the implications?
BADR would have been available
Cash gift would not have been a chargeable disposal
WHich figures can be included in a CGT saving?
Tax saved due to part of gain being taxed at basic rate instead of higher rate
Is death needed for RNRB?
YES
Payment on account for annual accounting figure used?
10% of previous year VAT liability
How to calculate cost of remaining four hectares sold?
Total cost of ten hectares - cost of six hectares already sold
Are quoted shares held in an ISA exempt in CGT?
YES
Why will a persinal pension give 20% tax relief?
She will contribute 80% of the £20000 and the goverment will co
ntribute the remaining 20%
Is it possible to carry forward a terminal loss relief?
NO
Which NIC applies to taxable benefits?
Class 1A
If bonus was paid after the period end?
It is disallowed
When is a bonus recorded?
When Percy is fucknig entitled to it
Charitable gift aid doantion is used to?
Extend the BRB
If question says van in employment income?
Use £3960 as the figure
Pre-trading advertising expenditure treatment?
Deducted
What is Class 1 NIC only relevant for?
Earnings only
When are improvements included in a property for income tax?
If incurred prior to start of year
Repairs not covered by insurance allowable or disallowable?
Allowable
Gifts to customers >£50
Disallowed
Advertising expenditure treatment?
Allowable
Non-trade loan interest receivable added or subtracted?
Added
Non-trade loan interest payable added or subtracted?
Deducted
legal fees in connection with a grant of short new lease?
Disallowable
Required to work overseas by employer and PRR?
All deemed occupation
Required to work away from home (not abroad) and PRR?
Deemed occupation doesn’t exceed four years
If whole of group gain is transferred, where will it show?
In sub’s computation
If parent transfers only their capital gain in the group?
It will show in the parent’s computation
When is a group claim made?
Two years after the end of the accounting period
What happens to personal allowance when trading loss is carried back?
It is wasted
Which loss relief is not available to a partner when they leave the partnership?
Carry forward for set off against future profits
What happens when credit is given to customers in cash accounting?
Output VAT could be accounted for later than at present (2 months later)
Input VAT and cash accounting?
Input VAT is not affected as it is based on a cash basis
Advantage of annual accounting scheme (overtime)?
Save overtime costs incurred in meeting filing requirements
Pre-trading expenditure incurred less than 7 years?
Allowable
Does an inter-spouse transfer cause CGT?
No as it is a no gain/no loss disposal
How is a child benefit charge collected?
Through the self-assessment system
What can the gross amount of pension do?
Extend the basic rate tax band
When someone isn’t a member of a pension scheme prior to 2023-24?
Annual allowances for 2020-21, 2021-22 and 2022-23 are not available
Forms of loss relief for a company?
Current period
Carry back
Carry forward
Advantage of annual accounting?
Only one VAT return each year
Manages cash flow more accurately
Disadvantage of annual accounting?
Bad if business is reducing turnover
More monitoring of taxable supplies
When can trading loss be surrendered in a group?
75% group relief
