INCOME TAX Flashcards
When UK res if split year and coming back to UK?
From day after finishing overseas job
When non res if split year and leaving UK?
“From DAY STARTING OVERSEAS JOB
‘Provided the full time work overseas conditions are met’”
What to look at if considering split year treatment (and someone e.g. going on secondment)
Full time UK work test
Doing the overseas tests in split residence?
PRO RATE the days
What to remember when someone is a split resident?
PA is TAPERED
How is e.g. dividend income treated when someone is on the remittance basis?
ALL NSI
Overseas and business pay for accommodation?
No IT
Overseas and visits of parents expensed?
YES IT
Selling UK shares while overseas?
“ANTI AVIODANCE RULE
Even if non-res, still taxable (on return) if in 5y”
What to remember if someone is non UK domiciled?
“Could ELECT REMMITANCE BASIS
In respect of their foreign income
But there are charges
If O/S income is low (2k) then it is automatic
Do both calcs and see which one is better!”
Deciding whether to elect for the remittance basis and on a high income so lost PA?
R.B. more desirable because it doesn’t matter that the R.B. removes the PA
Pension annual allowance
“60k
Get 3y previous
When it was 40k
AA charge over this”
What 2 things to remember when an individual pays into their personal pension?
“1. MAXIMUM RELIEF (Basically income with a 3,600 floor)
2. Annual allowance is TAPERED at high income (260k ‘adjusted income’)”
How to deal with property interest for an individual?
You get the 20% tax reducer, but then ofc are taxed on the whole income WITHOUT DEDUCTING THE INTEREST
Difference for employer when paying ltd company (assuming no OMB rules)?
“No NIC (Because paying an invoice)
They will ask the ltd company to pay it”
IR35 deemed income: “Less: Class 1 secondary NICs (Y × 13.8/113.8)”
Means multiply by the WHOLE (13.8/113.8) i.e. Y x (13.8/113.8) NOT one or the other
Difference between OPW when anti avoidance rules do apply, and just being an employee?
“Salary paid to ltd company not the individual
But no further tax when extracting as a dividend”
OMB & large loss relief claim?
“LOSS RELEIF FOR OMBS IS CAPPED
(Just 25% ANI, min 50k)
(ANI is just INCOME plus payroll giving less grossed up personal pension)”
Issues with OMB opening loss relief?
“HAVE TO go all 4y back, &
On TOTAL INCOME (Not just trade)
So risk of wasting lots of PA unless know 4y back”
Do sole traders get capital allowances?
“YES
You still get capital allowance as as sole trader”
Receive shares not in tax-advantaged scheme?
“Income Tax liability on gain
(Only NIC if readily convertible asset i.e. listed company)”
Beneficial interest - what does the company have to pay?
1A NICs (@ 13.8%)
How is statutory redundancy related for IT?
“ALL FULLY EXEMPT
(Tho reduces the 30k limit)”
Which rate is better: BR IT or marginal CT (20-250k)?
Basic rate @ 20%
