Chapter One - Income Tax

Question 1

What do you need to do to income from a purchase life annuity before adding it to an individuals total income?

Answer 1

Gross it up, and then take the tax relief away from the total tax liability at the end of the calculation

Question 2

What deductions can you have for interest payments?

Answer 2

Can deduct the annual interest as long as the interesr does not exceed £50,000 or 25% of the individual’s adjusted net income

Question 3

What deduction can be used for mortgage interest?

Answer 3

100% of the mortgage interest costs given at a basic rate tax deduction which is reduced from tax bill

Question 4

What is the property income and trading allowances?

Answer 4

Any income (before expenses) under £1,000 is tax free

Question 5

What is the marriage allowance?

Answer 5

Someone with no or little income can transfer their personal allowance to their basic rate taxpayer spouse which is a £250 reduction from tax bill

Question 6

What is the marrigage couple allowance?

Answer 6

Any couples who are married and born before 1935 are give a tax reducer of 10% of the £9,075 allowance.
This allowance is reduced by £1, for every £2 of income over £30,200, floor is £3,510.

Question 7

What is the high income child benefit charge?

Answer 7

There is a charge when income exceeds £50,000
Income - £50,000 / £100
This is then multiplied by 1% of the total child benefit