Chap 10

Question 1

what is the stamp duty rate

Answer 1

0.5% of purchase price of an asset

Question 2

when does stamp duty apply

Answer 2

when a buyer buys a certified share with a sale price of more than £1000

Question 3

what is stamp duty rounded to

Answer 3

the nearest £5

Question 4

what does SDRT apply to

Answer 4

it is charged on dematerialized transactions, regardless of size and is not rounded
i.e. UK registered share, options on shares, UK convertible loan stock

Question 5

what are the rules for Unit trusts and OEICs

Answer 5

there is no SDRT when the investor purchases from the fund manager but when units are surrendered the manager pays SDRT

Question 6

exempt transfers for SD and SDRT

Answer 6

AIM and NEX shares
Gilts
Non coupon paying corporate bonds
Overseas securities

Question 7

exempt recipients for SD and SDRT

Answer 7

recipients of gits
registered charities
LSE member firms who are not fund managers and are market makers

Question 8

SDLT tax %

Answer 8

up to 250,000 = 0%
250,000 to 925,000 = 5%
925,000 to 1,500,000 = 10%
over 1,500,000 = 12%

Question 9

how much higher are the SLDT tax % if you are not buying a main residence

Answer 9

3%

Question 10

when does a land purchaser have to pay SDLT by

Answer 10

they have to completed themselves and have to pay within 30 days of tranactoin

Question 11

commercial property SDLT rates

Answer 11

up to 150,000 = 0%
150,000 to 250,000 = 2%
above 250,000 = 5%

Question 12

who pays corporation tax

Answer 12

Companies

Question 13

what is corporation tax

Answer 13

19%

Question 14

how is corporation tax assessed

Answer 14

self assessed by companies

Question 15

when is corporation tax paid

Answer 15

9 months and 1 day after accounting period

Question 16

UK resident companies corporation tax liability

Answer 16

on their worldwide profits

Question 17

overseas company corporation tax liability

Answer 17

on their profits arising in the UK

Question 18

what can a company’s trading losses be offset by

Answer 18

income and gains from same accounting period
income and gains from previous year
trading profits from the same trade in future years

Question 19

what is VAT charge on

Answer 19

the provision of good and services in the UK

Question 20

standard rate VAT

Answer 20

20%

Question 21

reduced VAT and what it applies to

Answer 21

5%
energy products and services

Question 22

who can reclaim VAT

Answer 22

only companies making taxable supplies through VAT

Question 23

when do Stock brokers have to pay VAT

Answer 23

when providing discretionary and advisory advice

Question 24

max contributions into a pension (income tax free)

Answer 24

£40,000
or £36,000

Question 25

what is the max lifetime allowance of a pension

Answer 25

£1,073,100

Question 26

what is an uncrystallised funds pension lump sum

Answer 26

25% taken from pension pot taxfree

Question 27

what is the ISA allowancw

Answer 27

£20,000

Question 28

what is the junior ISA allowance

Answer 28

£9000

Question 29

what are the two types of offshore funds called

Answer 29

reporting non reporting

Question 30

what is a reporting offshore fund

Answer 30

fund reporting manager reports tax income to the HMRC the dividends received are taxable to UK residents any capital gain is taxed as capital gain losses can be offset by gains

Question 31

what is a non reporting fund

Answer 31

income and gains are both taxed as income so you pay a higher tax rate

Question 32

what is a life company bond

Answer 32

a bond offered by a life assurance company

Question 33

what are the qualifying rules for a qualifying policy

Answer 33

at least annual premium term to maturity of at least 10 years premiums totaling less than £3,600

Question 34

qualifying policies taxes

Answer 34

proceeds are non taxable i.e. there is no further tax to be paid on any payout from the policy

Question 35

non qualifying policy taxes

Answer 35

proceeds are tax at 20% if there are gains when bond matures you have to pay any additional tax basic rate = none higher rate = further 20% additional rate = further 25%

Question 36

how long can life company bonds be tax deffered until

Answer 36

a chargeable event i.e death or encashment

Question 37

what is a venture capital trust

Answer 37

it is a closed ended fund that invests into start ups

Question 38

venture capital trust tax wrapper

Answer 38

30% income tax relief only if you dont liquidate your holdings within 5 years when you dispose of the shares there is no CGT

Question 39

EIS tax wrapper

Answer 39

30% income tax up to £1 mill investment if held for 3 years no CGT if held for 3 years