Chapter 2 - Revision

Question 1

Reduction of PA

Answer 1

Over $100k

PROFORMA:
Personal Allowance X
Net Income X
Less: Gift Aid Donation Gross (X)
Less: PPC (Gross)
Total X
Take away $100k and multiply by 50% (X)

Question 2

Child Benefit

Answer 2

If above $60k net income, simply add child benefit in total

Same Method as Reduction of PA:

Child Benefit X
Net Income X
Less: Gift Aid Donation Gross (X)
Less: Lower Limit (X) $50k
Total: X
1% of Total as a % - Multiply by Child Benefit X

Question 3

Marriage Allowance PA Transfer

Answer 3

Can only be if a standard band tax rate!!!!

Can transfer a total of $252. This cannot exceed the other persons tax liability and restricts to match it if so

Net Income X
Less: PA (X)
Taxable Income X
Less: MA Transfer (X)
Income tax liability

Question 4

Qualifying Relief

Answer 4

Reduces from Net Income before PA reduction

Question 5

Gift Donations

Answer 5

Extends the bands by the gross amount:

Only add to higher rate as well if the donation is over $125,141

Basic Rate band X
Gift Aid Donation Gross X
Extended Basic rate band X

Question 6

Income from Assets

Answer 6

If stated owned jointly - split 50:50, if not assume wholly owned