Chapter 5 - Other Taxable Income Flashcards
At what rate is it assumed a taxpayer has received income from a discretionary trust in 2024/25?
45% tax reduced at source
What is the figure used to calculate the gross up net figure for the discretionary trust income?
amount x 100/55
True or false
Discretionary trust income may sometimes be regarded as interest income & may qualify for the savings or dividend allowance
False
Discretionary trust income is always regarded as non-savings income & therefore does not qualify for any allowances
What is non-savings income & income received by the trust taxed at in the hands of the trustee?
20%
What are dividends income taxed at in the hands of the trustee?
8.75%
Is the dividend & savings allowance available when calculating the tax payable by trustees?
No
True or false
The income paid out to an individual by the trust retains its nature
True
How do you calculate the non-savings & savings income gross up for IIP?
amount x 100/80
How do you calculate the dividend income gross up for IIP?
amount x 100/91.25
True or false
The savings allowance & dividend allowance will be available for IIP
True
An IIP retains its character
True or false
Any income arising from a fund provided by a parent for the benefit of a child will be taxed at the hand of the child
False
The income will be taxed at the hand of the parent except where the gross annual income is less than £100
How is a dividend & interest distribution from a unit trust taxed?
In the same way as other dividend and interest income
What rate tax is interest on company loan notes received at?
20%
How do you calculate the gross up for company loan notes?
amount x 100/80
Within how many days must a declaration be filed with HMRC?
60 days
The filing applies to income arising on or after the date of the declaration
When will an individual have qualifying care receipts?
If they provide foster care or shared lives care
True or false
When calculating total receipts for the tax year, no relief is given for any expenses incurred in relation to the provision of care
True
What are the two options for calculating the amount of income on which tax is payable when the gross qualifying care receipts exceed the individual’s qualifying amount?
- The profit method
the individual can be taxed on the gross receipt minus any expenses or capital allowances - The simplified method
the individual will be assessed on the gross qualifying care receipts less their individual qualifying amount
What are the 2 elements an individual’s limit / qualifying amount is made up of?
- a fixed amount of £19,360 per annum
- A weekly amount for each person placed with them (£405 for a child under 11, £485 for a child over 11)
