Ch2: Computing Taxable Income and Income Tax Liability

Question 1

Statutory Residence Test - What is meant by Automatic Overseas Test?

Answer 1

If the individual is in the UK for LESS THAN:
- 16 days
- 46 days and not resident in the UK for any of the last 3 years.
- 91 days and works full-time overseas.

Question 2

Statutory Residence Test - What is meant by the UK Test?

Answer 2

• Spend 183+ days in the UK in the TY.
• Only home is in the UK.
• Full-time employment in the UK.

Question 3

Statutory Residence Test - What is meant by the Sufficient Ties Test?

Answer 3

• Close family in the UK.
• Accommodation in the UK.
• Substantive work in the UK.
• In the UK for 90+ days in either of the previous 2 TYs.
• More time in the UK than elsewhere.

Question 4

Give some examples of Income that is exempt.

Answer 4

• Interest on damages for personal injuries.
• Statutory Redundancy Money.
• Winning (including Premium Bind Prizes).
• Income from investments made through ISA.
• Scholarships.
• Income from NS&I.
• Local Authority Grants.

Question 5

What is the threshold for Child Benefits?

Answer 5

If ANI is between £50,000 - £60,000.
So we MINUS £50,000.

Question 6

Proforma for calculating Child Benefit.

Answer 6

Net Income (ANI)
LESS Threshold (£50,000)
Excess
/100
Formula: [1% * Child Benefit Amount * the /100 Excess Value]

Question 7

Proforma when calculating Gift Aid

Answer 7

The PA will not be £12,570, but you will need to calculate it.

Net Income
LESS Gift Aid Donations [Gift Aid Amount * 100/80]
ANI
LESS Income Limit (£100,000)
Excess
PA
LESS Half of Excess