Chapter 2 Income Tax Computation Flashcards
What is an individuals Adjusted Net Income?
Net income - personal allowance - (Gross pension and gift aid donations)
Income from a jointly owned property is…
Split equally for spouses…
OR split per percentage of ownership for non spouse
Marriage allowance
£1250 of their personal allowance, IF BOTH:
BRTP and has remaining PA
When can interest payments be used as a tax reducer?
To buy plant and machinery in a trade or Partnership
Buy plant for employment
to buy interest in a control, or employee controlled company
invest in partnership
Pay inheritance tax
What is the child benefit amount for the first child?
£1,095
What is the child benefit for subsequent children
£725
When is a charge given for child benefit?
ADJUSTED NET income greater than £50,000
What is the charge on child benefit?
1% for each £100 between £50-60,000
What is the charge on child benefit for ANI over £60,000
100%
Where is the tax charge given for child benefit
ADDED to the Tax liabilty
How much child benefit is added to taxable income?
None …. Only the charge is added to the tax liabilities
What reduces a personal allowance
ANI above £100,000
