C6 C6 - Tax In UK (10-20 Qs)

Question 1

An investor purchases shares in Xanadu for £40k and shares in Connect plc for £30k. These are sold within the same tax year for £56k (Xanadu plc) and £29k (Connect plc).

If the annual exempt amount is £6k and the investor is a HRT, what is the CGT payable?
A) £0
B) £1,800
C) £2,000
D) £9,000

Answer 1

B - £1,800*

Capitals gains Xanadu £16k
- Capital losses -£1k
- CGT exempt amount -£6k
= £9k
x 20% HRT rate
= £1,800

Question 2

What is the turnover threshold for a trader to be required to register for VAT?
A) Over £50k
B) Over £75k
C) Over £85k
D) Over £95k

Answer 2

C - over £85k

Question 3

An additional rate taxpayer with a salary of £155k receives £2,220 in building society interest
What is the tax payable on the savings income?
A) £888
B) £999
C) £444
D) £722

Answer 3

B - £999

Additional rate taxpayers do not have a tax free allowance for savings income, hence this taxpayer will pay 45% on all of the interest.

Question 4

What type of profits are used to work out Corporation Tax?
A) EBITDA
B) EBIT (operating profits)
C) Gross Profits
D) Net income

Answer 4

B - EBIT / Operating Profits

Question 5

What rate of tax would a higher rate taxpayer suffer on savings interest received of £400
A) 40%
B) 20%
C) Nil
D) 7.5%

Answer 5

C - Nil

Higher rate tax is 40% on savings interest over the £500 allowance

Question 6

What is the maximum income tax relief an investor can receive by investing in an EIS?
A) 10% on an investment of up to £100k
B) 30% on an investment of up to £100k
C) 10% on an investment of up to £1m
D) 30% on an investment of up to £1m

Answer 6

D - 30% on an investment of up to £1m

Question 7

If John gives a yacht to his daughter but continues to use it as if it were his own, it would be known for inheritance tax purposes as a:
A) Potentially exempt transfer
B) Chargeable lifetime transfer
C) Gift with reservation
D) Tax exempt transfer

Answer 7

C - Gift with reservation

A gift with reservation of benefit occurs when an individual transfers ownership of a property to someone else but continues to benefit from or use that property. In simpler terms, it’s like giving away your cake but still wanting to eat it too!

Gifts with reservation of benefit are subject to the seven-year rule for inheritance tax purposes. If the donor survives for seven years after making the gift, it becomes exempt from inheritance tax. However, if the donor retains any benefit from the gifted property, it may still be subject to inheritance tax.

Question 8

Janet is employed by an insurance company and, since starting her employment, has regularly paid her National Insurance Contributions (NICs). What is the minimum number of years that she needs to pay her NICs in order to qualify for the maximum new state pension introduced from 6 April 2016?
A) 25 years
B) 30 years
C) 35 years
D) 40 years

Answer 8

C - 35 years

Question 9

The exempt limit for capital gains made by a couple is:
A) £2,000
B) £12,000
C) £24,000
D) £37,500

Answer 9

B - £12,000

£6,000 x 2 = £12,000

Question 10

Which of the following investment services will normally incur VAT at the standard rate?
1. Arranging the sale of a retail investment product
2. Nominee services
3. Investment advice

A) 1 only
B) 2 and 3 only
C) 3 only
D) All of the above

Answer 10

C - 3 (Investment Advice) Only

Question 11

What are the property value bandings and rates for SDLT on residential properties?
A) £0k to £150k at 0%, over £150k to £250k at 2%, and over £250k at 5%
B) £0k to £250k at 0%, over £250k to £925k at 2%, over £925k to £1.5m at 5% and over £1.5m at 10%
C) £0k to £250k at 0%, over £250k to £925k at 5%, over £925k to £1.5m at 10% and over £1.5m at 12%
D) £0 to £150k at 0%, over £150k to £250k at 5%, and over £250k at 10%

Answer 11

C - £0k to £250k at 0%, over £250k to £925k at 5%, over £925k to £1.5m at 10% and over £1.5m at 12%

Question 12

What income tax allowance do basic taxpayers (BRT) receive on savings?
A) £500
B) £1,500
C) 1,000
D) 6,000

Answer 12

C - £1,000

Question 13

Out of the total annual ISA allowance, what is the maximum percentage that can be invested in a cash ISA?
A) 25%
B) 50%
C) 75%
D) 100%

Answer 13

D - 100%

Question 14

Which of the below statements is TRUE with regards to tax on REITs?
A) Income and Capital Gains are both payable at REIT level
B) Shares for REITs are treated as normal dividends for tax
C) Income and Capital Gains are taxed at investor level
D) REITs are exempt from CGT, but does have income tax

Answer 14

C - Income and Capital Gains are taxed at investor level

Any rental income a capital gains is exempt from tax at the REIT level, but are taxed at the investor level when they are paid as dividends. To ensure income and gains are taxed at the investor level, REITs are required to distribute the majority of their tax-exempt rental income (but not gains) to shareholders. BRT at 20% is generally withheld from the dividend, with the dividend then taxed as property income at the investor’s marginal tax rate, with benefit of a credit for the tax withheld.

Question 15

Upon disposal of which of the following could CGT arise?
1. Rolls Royce Silver Shadow
2. Van Gogh painting
3. Timeshare in Tenerife
4. Foreign currency for personal use

A) All of the above
B) 2 and 3
C) 2, 3 and 4
D) 1, 2 and 3

Answer 15

B - 2 (painting) and 3 (timeshare)

Question 16

What are the property value bandings and rates for SDLT on commercial properties?
A) £0k to £150k at 0%, over £150k to £250k at 2%, and over £250k at 5%
B) £0k to £250k at 0%, over £250k to £925k at 2%, over £925k to £1.5m at 5% and over £1.5m at 10%
C) £0k to £250k at 0%, over £250k to £925k at 5%, over £925k to £1.5m at 10% and over £1.5m at 12%
D) £0 to £150k at 0%, over £150k to £250k at 5%, and over £250k at 10%

Answer 16

A - £0k to £150k at 0%, over £150k to £250k at 2%, and over £250k at 5%

Question 17

At what value does a residential property have SDLT payable (2023/24)?
A) Over £150k
B) Over £200k
C) Over £225k
D) Over £250k

Answer 17

D - Over £250k

Question 18

What is the current personal allowance for income tax?
A) £10,570
B) £12,570
C) £14,470
D) £15,570

Answer 18

B - £12,570

Question 19

An investment in a VCT will qualify for tax deduction of what percentage of the amount invested?
A) 10%
B) 15%
C) 20%
D) 30%

Answer 19

D - 30%

Question 20

Which of the below statements is TRUE with regards to tax on REITs?
A) Income and Capital Gains are both payable at REIT level
B) Shares for REITs are treated as normal dividends for tax
C) Income and Capital Gains are taxed at investor level
D) REITs are exempt from CGT, but does have income tax

Answer 20

C - Income and Capital Gains are taxed at investor level

Any rental income a capital gains is exempt from tax at the REIT level, but are taxed at the investor level when they are paid as dividends. To ensure income and gains are taxed at the investor level, REITs are required to distribute the majority of their tax-exempt rental income (but not gains) to shareholders. BRT at 20% is generally withheld from the dividend, with the dividend then taxed as property income at the investor’s marginal tax rate, with benefit of a credit for the tax withheld.

Question 21

What is the current personal allowance for income tax?
A) £10,570
B) £12,570
C) £14,470
D) £15,570

Answer 21

B - £12,570

Question 22

When are shares under a EIS and SEIS exempt from CGT?
A) Always
B) When income tax relief has not been withdrawn
C) When there has been unclaimed CGT losses in the current or previous years
D) Never

Answer 22

B - When income tax relief has not been withdrawn

CGT losses can be used to offset the amount payable by doesn’t not make anything exempt.

Question 23

What is the CGT tax rate for Basic taxpayers?
A) 5%
B) 10%
C) 15%
D) 20%

Answer 23

B - 10%

Question 24

What is the maximum level the higher taxpayer rate for income tax to be applied?
A) £112,570
B) £120,500
C) £122,140
D) £125,140

Answer 24

D - £125,140

Question 25

Which of thr following are TRUE:
1. Proceeds from all life assurances policies are taxable
2. Income from pension funds is taxable
3. Contributions to pension funds are taxable

A) 1 only
B) 2 only
C) 3 only
D) All of them

Answer 25

B - 2 (Income from pension funds is taxable)

Proceeeds from a qualifying life assurance policies (such as endowments) are tax-free, whilst proceeds from pensions are taxable. Contriubtions to pension are usually made from the net earnings, but as tax relief is given on them it is fair to say that 3 is false.

Question 26

Up to what age is an individual entitled to tax relief on contributions to a registered pension scheme?
A) 60 years
B) 65 years
C) 70 years
D) 75 years

Answer 26

D - 75 years

Question 27

Quarterly payment of corporation tax applies to companies with a level of profits exceeding:
A) £100k
B) £300k
C) £1.5m
D) £2m

Answer 27

C - £1.5m

Companies with profits exceedng £1.5m must pay on a quarterly basis

Question 28

At what age can domicile of choice be acquired?
A) from birth
B) from 16 years
C) from 18 years
D) from 21 years

Answer 28

B - from 16 years

Question 29

Lisa bought a residential property situated in England for £365k. She doesn’t own any other properties and she is not a first time buyer
What amount of SDLT will be paid in respect of Lisa’s property purchase?
A) £0
B) £7,750
C) £5,750
D) £18,250

Answer 29

C - £5,750

0-250k at 0%
250k - 925k at 5%

£115k in second band so £5,750

Question 30

At what rate would A plc pay corporation tax if its taxable profits were £1.6m?
A) 19%
B) 40%
C) Somewhere between 19% and 40%
D) 25%

Answer 30

D - 25%

For a company with this level of profit, corporation taxt (being the main rate as over £250k profits), corporation tax is charged at 25%.

Question 31

What are the property value bandings and rates for SDLT on commercial properties?
A) £0k to £150k at 0%, over £150k to £250k at 2%, and over £250k at 5%
B) £0k to £250k at 0%, over £250k to £925k at 2%, over £925k to £1.5m at 5% and over £1.5m at 10%
C) £0k to £250k at 0%, over £250k to £925k at 5%, over £925k to £1.5m at 10% and over £1.5m at 12%
D) £0 to £150k at 0%, over £150k to £250k at 5%, and over £250k at 10%

Answer 31

A - £0k to £150k at 0%, over £150k to £250k at 2%, and over £250k at 5%

Question 32

For CGT purposes, what type of relief is granted on the proceeds from ‘green shoots’ investments?
A) Withholding
B) Entrepreneurs
C) Indexation
D) Executive

Answer 32

B - Entrepreneurs

Question 33

A HRT receives dividend income of £800. What is the investor’s net income after the payment of any tax due?
A) £730
B) £530
C) £480
D) £800

Answer 33

D - £800

All taxpayers have £1,000 allowance for dividends, so there is not tax to pay and the investor gets the full £800.

Question 34

What are the CGT rates for BRTs, HRTs and ARTs?
A) 20%, 40%, and 45%
B) 10%, 20% and 40%
C) 10%, 20% and 20%
D) 20%, 30% and 30%

Answer 34

C - 10%, 20% and 20%

Question 35

What are the three VAT rates?
A) 30%, 10% and 0%
B) 20%, 10% and 5%
C) 20%, 5% and 0%
D) 25%, 5% and 0%

Answer 35

C - 20%, 5% and 0%

Standard rate 20%, reduced rate at 5% and zero rate at 0%

Question 36

At which salary does a taxpayer completely lose their personal allowance for income tax?
A) £100k
B) £125,700
C) £112,570
D) £125,140

Answer 36

D - £125,140

The personal allowance of £12,570 is withdrawn at a rate of £1 for every £2 earned where a taxpayer’s income exceeds £100k, so by £125,140 a taxpayer completely loses their personal allowance

(£125,140 - £100,000) ÷ 2 = £12,570

Question 37

What is the higher taxpayer rate for income tax?
A) 40%
B) 30%
C) 45%
D) 35%

Answer 37

A - 40%

Question 38

What of the following statements is CORRECT for allowances on income tax for dividends?

A) All taxpayers, not matter what rate they are on, receive an allowance of £1,000 for dividends

B) Both Basic (BRT) and Higher rate taxpayers (HRT) receive an allowance of £1,000 for dividened, but additional rate taxpayers (ART) recieve no allowance

C) BRT receive £1,000 in allowace, HRT receive £500 and ART receive no allowance

D) Dividend income is added on top of the salary income and the total is then taxed at the usual non-saving (i.e. salary) income tax rates with the £12,570 allowance.

Answer 38

A - All taxpayers, not matter what rate they are on, receive an allowance of £1,000 for dividends

Question 39

What is the amount of Stamp Duty Reserve Tax (SDRT) payable on a purchase of shares equal to £20k?
(a) £0
(b) £100
(c) £500
(d) £1,000

Answer 39

B - £100

SDRT is charged at 0.5% on the value of purchased shares. In this case, £20,000 * 0.005 = £100

Question 40

How much tax would an additional rate tax payer be liable for on receipt of a £9k dividend
A) £675
B) £2,025
C) £1,524
D) £3,148

Answer 40

D - £3,148

The tax free allowance for all taxpayers is £1,000
Hence (£9,000 - £1,000) x 0.3935 = £3,148

Question 41

Which one of the following does NOT attract income tax relief?
A) An investment in a life assurance bond
B) A contribution to a registered pension scheme
C) An investment in a VCT
D) An investment under the EIS

Answer 41

A - An investment in a life assurance bond

No income tax relief is available for life assurance bonds. Any withdrawal from a life assurance bond of up to 5% of the initial amount is tax free at the time of withdrawal, but this is effectively tax deferred as the investor may still have to pay income tax on any gain when the bond is cashed in.

Question 42

Which of the following do not attract capital gains tax?
1. Second homes
2. Gilts
3. Cars
4. EIS shares

A) 1 and 2
B) 2 and 4
C) 1, 2 and 3
D) 2, 3 and 4

Answer 42

D - 2 (Gilts), 3 (cars) and 4 (EIS shares)

Question 43

A higher rate taxpayer pays £288.89 on a dividend received in their annual tax return
(Ignoring th dividend allowance of £1,000), what was the amount of the dividend received?
A) £700
B) £800
C) £400
D) £856

Answer 43

D - £856

33.75% x Dividend recieved = £288.89.
Rearrange, £288.89/33.75%(0.3375) = £856

Therefore dividend recieved = £856

Question 44

What income tax allowance do higher taxpayers receive on savings?
A) £1,000
B) £500
C) £750
D) £250

Answer 44

B - £500

Question 45

What percentage of the initial investment of a life assurance bond can be withdrawn in a tax year without an immediate income tax liability?
A) 5%
B) 10%
C) 15%
D) 20%

Answer 45

A - 5%

Question 46

Tony is employed as a salesman by a company. The company has provided him with a car which Tony uses for business and for personal use. The class of National insurance contributions the the company has to pay is:
A) Class 1A Contributions
B) Class 1B Contributions
C) Class 2 Contributions
D) Class 3 Contributions

Answer 46

A - Class 1A Contributions

Class 1 is payable by employees and employers
Class 1A, paid by your employer if they provide you with certain benefits-in-kind (I.e. car for personal use) Class 1B, paid by your employer if they enter into a special arrangement with HMRC called a PAYE settlement agreement.

Class 2 is a flat rate payable by the self-employed
Class 3 is voluntary contributions paid by people who want to complete their National Insurance record for benefit purposes, but are not otherwise liable to pay National Insurance,
Class 4, which payable on profits above a set level by the self-employed

Question 47

What is SDRT payable on?
A) Paid on paperless transactions when an investor buys
B) Paid on land transactions involving any estate, interest, right or power in or over land
C) Paid on luxury goods like cigarettes outside of duty free zones
D) Paid on classic cars when sold as a collectible

Answer 47

A - Paid on paperless transactions when an investor buys

Question 48

At what income threshold does an individual start to lose their personal allowance?
A) Over £90k
B) Over £95k
C) Over £100k
D) £125,140

Answer 48

C - £100k

The personal allowance of £12,570 is withdrawn at a rate of £1 for every £2 earned where a taxpayer’s income exceeds £100k

Question 49

What is the maximum tax deferred allowance that a person can withdraw from a single premium insurance bond each year?
A) Up to 5% of its current market value only
B) Up to 5% of its original market value only
C) Up to 5% of its current market value plus any unused allowance from previous years
D) Up to 5% of its original market value plus any unused allowance from previous years

Answer 49

D - Up to 5% of its original market value plus any unused allowance from previous years

Question 50

What is the SDRT rate payable on paperless transactions?
A) 1%
B) 1.5%
C) 0.5%
D) 3%

Answer 50

C - 0.5%

Question 51

Up to what amount does the 0% savings starting rate apply?
A) £3,000
B) £5,000
C) £6,000
D) £7,500

Answer 51

B - £5,000

However, a person only qualifies for this 0% rate if their non-savings income is below the personal allowance plus £5k - so £17,570.

Question 52

At what value does SDLT become payable on non-residential property?
A) Over £100k
B) Over £150k
C) Over £200k
D) Over £250k

Answer 52

B - Over £150k

Question 53

At what rate is the additional taxpayer income rate applied?
A) 35%
B) 40%
C) 45%
D) 50%

Answer 53

C - 45%

Question 54

Which of these LEAST accurately represents a benefit for an investor in a VCT?
A) Tax free dividends over any holding period
B) A tax reduction of 30% of the amount invested whatever the holding period
C) Capital gains tax free gains on sale of shares over any holding period
D) The VCT itself has tax exempt capital gains

Answer 54

B - A tax reduction of 30% of the amount invested whatever the holding period

Only capitals gains of the VCT itself are exempt over WHATEVER period, the 30% reduction to the investor must be at least for 5 years or if the entity ceases to qualify as a VCT.

Question 55

What is the tax obligation on a dividend received by a 40% taxpayer?
A) 8.75%
B) 33.75%
C) 20%
D) 40%

Answer 55

B - 33.75%

Higher rate dividend tax is 33.75%

Question 56

What can be used to reduce a capital gain?
1. Capital losses in the same fiscal year
2. Unused capital losses brought forward from previous years
3. The annual allowance

A) 1 only
B) 1 and 2
C) All of them
D) 2 and 3

Answer 56

C - All of them

Question 57

Which of the following transfers are EXEMPT for inheritance tax purposes?
A) Transfer to a child
B) Transfer to a spouse
C) Transfer to a parent
D) Transfer to a family company

Answer 57

B - Transfer to a Spouse

Question 58

What income tax allowance do additional taxpayers receive on savings?
A) Nil
B) £250
C) £500
D) £750

Answer 58

A - Nil

Question 59

When is SDRT payable?
A) On the sale of interests of land by the sellor
B) On the purchase of shares by the purchaser
C) On the sale of shares by the seller
D) On both the purchase of shares by the purchaser AND the sale of shares by the sellor

Answer 59

B - On the purchase of shares by the purchaser

Stamp Duty Reserve Tax (SDRT) is a tax which is charged on agreements to transfer ‘chargeable securities’ for consideration at a rate of 0.5% (0.005 on calculator!)

Question 60

For 2023/24, what is the maximum income applied at the basic tax rate:
A) £32,300
B) £35,550
C) £37,700
D) £38,300

Answer 60

C - £37,700

Question 61

In cashing a life assurance investment bond may trigger?
A) A capital gains tax liabilty
B) A chargeable event
C) A taxable event
D) An income event

Answer 61

B - A chargeable event

Life funds deduct 20% tax. Surrendering and death are called chargeable events

Question 62

A HRT will pay what amount of tax on savings income of £1,000 received during 2023/24?
A) £0
B) £100
C) £200
D) £400

Answer 62

C - £200

£1,000 - £500 allowance
£500 at 40% rate
£200

Question 63

What is the maximum percentage of a pension fund that can be taken as a pension commencement lump sum (PCLS) on retirement?
A) 10%
B) 20%
C) 25%
D) 30%

Answer 63

C - 25%

Question 64

Following the end of a tax year, when must income and capital gains tax must be submitted by?
A) 31st October for hard copies and 31st January for electronic
B) 30th September for hard copies and 31st December for electronic
C) 31st October for hard copies and 31st March for electronic
D) 30th September for hard copies and 31st January for electronic

Answer 64

A - 31st October for hard copies and 31st January for electronic

Question 65

Leigh makes a gift of her second home in York to her daughter Rebecca and retains no financial interest in the home. How much longer does Leigh need to live before the gifted home is no longer counted as part of Leigh’s estate and subject to an inheritance tax liability?
A) 3 years
B) 5 years
C) 6 years
D) 7 years

Answer 65

D - 7 years

Question 66

A basic rate taxpayer receives £1,500 savings income
Calculate the tax liability?
A) £300
B) Nil
C) £100
D) £112.5

Answer 66

C - £100

Basic rate taxpayers may receive up to £1,000 of savings income tax free
£500 x 20% = £100 tax

Question 67

Joe is planning to sell some shares that will result in a chargeable gain of £18k. Assuming the CGT annual exempt amount for that tax year is £6k and Joe’s wife is not planning to use her annual exempt amount, what is Joe’s taxable gain if he instead transfers 50% of the shares to his wife prior to the disposal?
A) £3k
B) £6k
C) £9k
D) £12k

Answer 67

A - £3k

No CGT arises from Joe’s transfer of 50% of the shares to his wife.

Taxable gain = (£18k x 50%) - £6k = £3k
Then the correct CGT rate is to be applied to the £3k to get the tax payable

Question 68

A chargeable lifetime trust (CLT) gift to a discretionary trust in excess of the settlor’s nil rate band at the time of the transfer is subject to IHT at which of the of the following rates?
A) 0%
B) 10%
C) 20%
D) 40%

Answer 68

C - 20%

A CLT that is in excess of the settlor’s nil rate band is subject to an immediate 20% IHT charge, the standard IHT rate being 40% for the value above the nil rate band threshold.

A CLT is a gift made during an individual’s lifetime which is immediately chargeable to IHT. This does not necessarily mean that there will be IHT to pay but it does have to be assessed to see if a charge to IHT will arise.

Question 69

Mrs Christie makes a capital gain of £25k and a capital loss of £7k. She is a higher rate taxpayer for income purposes
What amount of CGT should she pay, given an annual allowance of £6k
A) £9,600
B) £2,400
C) £3,160
D) £7,800

Answer 69

B - £2,400

Gains (£25k) - Loss (£7k) = £18k
Less annual exemption £18k- £6k = £12k
Tax: £12k x 20% (upper CGT rate) = £2,400

Question 70

Which of the following is TRUE with regards to OEIC shares and inheritance tax?
A) OEIC shares are exempt from IHT
B) OEIC shares are included as part of a deceased’s estate
C) OEIC shares purchased more then seven (7) years before death are exempt
D) OEIC shares held in an ISA are exempt from IHT

Answer 70

B - OEIC shares are included as part of a deceased’s estate

OEIC (Open Ended Investment Companies) are chargeable assets for IHT purposes.

Question 71

What is the CGT tax rate for higher and additional taxpayers?
A) 10%
B) 15%
C) 20%
D) 30%

Answer 71

C - 20%

Question 72

Which of the following is EXEMPT from CGT and income tax?
A) A pension fund
B) A life assurance fund
C) An investment trust
D) An unauthorised unit trust

Answer 72

A - Pension Fund

Question 73

What are correct rates for Dividend income tax for basic, higher and additional taxpayer rates respectively?
A) 5%, 20%, and 40%
B) 7.5%, 34.5%, and 48.35%
C) 20%, 40%, and 45%
D) 8.75%, 33.75%, and 39.35%

Answer 73

D - 8.75%, 33.75%, and 39.35%

Question 74

An investor owns 25,000 shares in a company which pays a dividend of 22p per share The investor is a higher rate taxpayer
What is the tax to be paid by the the investor?
A) £2,025
B) £1,575
C) £1,462.50
D) £1,518.75

Answer 74

D - £1,518.75

Dividend = 25,000 x £0.22 = £5,500
Less dividend allowance: £5,500 - £1,000 = £4,500
Tax: £4,500 x 33.75% = £1,518.75

Question 75

Which two (2) of the following might be suitable investments for a higher rate taxpayer?
1. A building society deposit
2. High yield equities
3. Traded options
4. Low coupon short-dated gilts

A) 1 and 2
B) 1 and 3
C) 1 and 4
D) 3 and 4

Answer 75

D - 3 (traded options) and 4 (low coupons)

CGT is lower than income tax for HRT, so traded options might be suitable. Gilts are exempt CGT, and the lower coupons minimise income tax

An option is a contract that represents the right (but not obligation) to buy or sell a financial product at an agreed-upon price for a specific period of time. You can typically buy and sell an options contract at any time before expiration. Options are available on numerous financial products, including equities, indices, and ETFs. People use options for income, to speculate, and to hedge risk.

Question 76

What is the income tax rate for basic rate taxpayers?
A) 15%
B) 20%
C) 25%
D) 30%

Answer 76

B - 20%

Question 77

A limited company structure has been used to purchase a residential property in London for £3m. How much Stamp Duty Land Tax is payable on this transaction?
A) £139,500
B) £271,250
C) £450,000
D) £570,000

Answer 77

C - £450,000

An anti-avoidance rate of 15% is charged on the entire purchase price where companies buy residential properties with a value over £500,000. Therefore tax paid = £3,000,000 * 0.15 = £450,000

Question 78

What of the following is NOT exempt from CGT?
A) Premium bond prizes
B) Betting and lottery winnings
C) UK government gilts and most corporate bonds
D) Residential property which is not the main residence

Answer 78

D - Residential property which is not the main residence

18% and 28% for basic and higher/additional taxpayers respectively is payable on the sale of a residential property which is not their main residence.

Question 79

What percentage is a person allowed to transfer of their personal allowance to their spouse or civil partner who is a BRT?
A) 5%
B) 12%
C) 7.5%
D) 10%

Answer 79

D - 10%

A fixed amount of £1,260 (10% of their personal allowance) can be transferred to a BRT spouse or civil partner’s personal allowance which saves them £252 in tax (£1,260 at the 20% BRT tax rate). Such cannot be transferred to a HRT or ART.

Question 80

What percentage of estate needs to be left to charity benefits for there to be a reduced IHT tax rate?
A) 15% of the gross estate
B) 10% of the gross estate
C) 15% of the net estate
D) 10% of the net estate

Answer 80

D - 10 of the net estate

Anyone leaving at least 10% of their net estate to charity benefits from a reduced IHT rate of 36%