General Tax Flashcards
What is the Marriage Allowance?
Allows you to transfer 10% of the Personal Allowance where you’re earnings is less than £11,850 (£1,190) and your spouse earns between £11,850 and £46,350 (£11,850 + £34,500)
When did GAAR take effect?
From 17th July 2013
What is the purpose of GAAR?
Intends to counteract tax advantages arising from tax arrangements that are abusive.
Where tax advantage is one of the main purposes and gives wide scope to the legislation
The rule apply across a number of taxes
Options given by the GAAR Advisory Panel.
What new measures were introduced in the Finance Act 2016
Allowing HMRC to issue PROVISIONAL COUNTERACTION NOTICES within normal assessment time limits to prevent tax loss
Allowing HMRC to issue
POOLING NOTICES
and NOTICES OF BINDING
so that taxpayers with equivalent arrangements can be counteracted by a single GAAR ADVISORY PANEL decision
GAAR penalties of 60% of counteracted tax
The introduction of;
sanctions for serial tax avoiders;
penalties,
publication of names,
withdrawal of access to certain reliefs
With ISA’s what does APS stand for ?
Additional Permitted Subscription
What are the APS rules?
Spouse or Civil Partner who died on or after 3rd December 2014.
No size limit but both pot sizes are combined as one, allowing for the fact that the survivors limit is £20,000
Subscription to any type of ISA (cash, stick & shares, innovative finance ISA). Payment to deceased ISA provider or another but not all will.
Can transfer whole APS to another provider but cannot be split.
The election can be made up to 3 years from the date of death
Can only make the one election but future ISA transfers are permitted.
What are the SAYE rules?
Max £500 pm
After 3 or 5 years the savings is used to buy shares
Tax advantages of SAYE
Interest and any bonus is tax fee
No Income Tax liability on the difference between current value and what was paid.
Potential liability to CGT
NO CGT in invested into an ISA within 90 days of buying them
Or if immediately into a Pension
Tax treatment on Share Incentive Plan (SIP)
No income tax or NI if held for 5 years
What happens if there are taken into own name?
Potentially liable to CGT in future gains
How can you give scheme shares?
- Free Shares - Employer can give up to 3,600 of free shares per tax year
- Partnership Shares - an employee can buy out of Pre Taxed salary up to a limit of £1,800 or 10% of Income if lower. In most cases £150 pm
- Marching Shares - employer can give up to 2 free matching for everyone one purchased by the employee.
- Dividend Shares- can buy more shares from Partnership or matching. Tax free if dividends held for 3 years.
Tax and NI due on Shares if taken out of the SIP early.
How is the Tax Code Worked our?
HMRC will tell employer or Pension provider how much tax free income is paid out
In taxed Interest and employee benefits are added up
Untaxed income is taken away from the Personal Allowance
The last digit in the Tax Free income figure is removed
What is the SDLT tax scale?
0 - £125k 0 / 3%
£125k - £250k 2% / 5%
£250.01 - £925k 5% / 8%
£925.01 - £1.5m 10% / 13%
£1.5m + 12% / 15%
What are the HMRC IHT forms?
Shorter IHT 205 for Expected Estate - smaller estates and overseas assets of less than £100,000
Otherwise it’s the more complex IHT400 form
