income tax

Question 1

who pays IHT and what does income include

Answer 1

individuals - partners trustees and prs pay it. companies pay corporation tax on their income profits. iht is charged on income, which includes salary dividends interest recieved trading profit and rent recieved.

recurring in nature

Question 2

rwhen does the IT year begin and end

Answer 2

runs from 6th april - 5th april next year

Question 3

explain what is meant by the terms taxable income and overlap profit

Answer 3

taxable income is total gross income after deduction of allowable reliefs and personal allowances.

Question 4

true or false - a higher rate taxpayer will pay IHT at the higher rate on all their taxable income

Answer 4

false - it is a progessive tax which means that the rate increases as income increases. individuals may make use of the lower rates first put pay it at the higher rate as their income increases

Question 5

true or false - when a new partner joins a firm, the opening year rule willy apply to them, but the existing partners will be assessed for it on the current year basis

Answer 5

true - the existing partners will continue to be assessed on the current year basis