Income Tax

Question 1

Income Taxx Computation

Answer 1

Trading income        NSI SI DI Total
Employment Income
Bank Interest ( 100/80)
Dividends ( 100/90)
Property Income 
REIT Inc ( 100/80)

Total income
Gifts of asset to charity/ qualifying loan interest

Net income
Personal allowance

Taxable Income

Taxable income

Question 2

Income tax individuals chargesss

Answer 2

Income tax is chargeable on individuals and every individual is treated as a seperate taxable person.

Question 3

Exempt income

Answer 3

Interest in National Savings certificates

New Individual Savings Accounts.

Betting, lottery and premium bond winnings.

4250 of gross annual rentssss-from letting!!

Scholarships

Income tax repayment interest..

Bank interest is 10/80
Debenture interest
Other Loan Interest
PPI compensation payments
.
..

Question 4

Personal Allowance Reduction

Answer 4

By every £1 for every £2 over 100000 then it’s stopped…

Question 5

Child Benefit Tax Charge

Answer 5

The Child Benefit Rate is 1076 per year for the eldest child and 712 per year after that. Page..

Income tax charge applies if a taxpayer in receipt of child benefit with adjusted net income over 50,000 in tax year. The child benefit is reduced by £1 for every £100..

Question 6

Child Benefit Q’s.

Answer 6

First get the child benefit.
Then adjust the net income. For any gift aid.
Child benefit for two- 1076 + 712
Adjusted net income- 57589-400
Threshold (50,000)
Excess 7189
Divide 100
=1788*.71...
...

Question 7

Employment Income..

Answer 7

Work out the total taxable Income.
Then calculate the tax rate bands.

Then subtract the tax deducted at source-
20% for interest

10% for dividends..

-PAYE…

Question 8

The second part of the Income Tax Computation

Answer 8

The first part is the taxable income.

Then you have the second part which works out the real amount of tax.

Question 9

Income Tax Part Two

Answer 9

Income Tax computation
-following the income tax taxable income working out.

Income Tax

NSI 20 40 45
SI 0 to 5000 20 40 45..
Di @ 10 32.5 37.5

Less MCA @ 10

Income tax liable

Less tax credits deducted at source.

Di 10%
.

Question 10

Income tax the different ones

Answer 10

First it’s…
TAXABLE INCOME

Then it’s

Income Tax Liability

Then it’s

Income Tax Payable

Question 11

The

Answer 11

Total income chargeable to income tax is called Net Income…
Personal Allowance is then deducted from net income.

Question 12

Net income

Answer 12

Net income less gross gift aid donations and personal pension conts…

Question 13

Gift Aid-extends

Answer 13

the basic rate band and the higher rate…

Question 14

Gifts of assets to charities

Answer 14

When you sell something to a charity at undervalue the deduction is calculated by

Market Value
Incidental costs of disposal

Less

Amt the charity paid..

Question 15

Reduction in the 100,000

Answer 15

When working the reduction in the personal allowance - the Gift Aid Donations!!!

Question 16

Income Tax-interest payments.

Answer 16

If an individual takes out a loan for a qualifying purpose, the interest paid during the tax year is deductible from total income.

Question 17

Child Benefit

Answer 17

When calculating the child benefit charge subtract the gross gift aid from the income.

Question 18

Personal Age Allowance

Answer 18

The Personal Age Allowance applies to people who were born before 6 1938.

The Personal Age Allowance is 10660.

Reduce the PA by 1 for each 2 in excess of 27700..

Question 19

Married Couples Personal - Older..

Answer 19

PAA for olde married couples…

If one of the married people is born before 6 April 1935.

If they got married before 5 December 2005 then the man claims it because people were sexist before !!!

After 5 Dec 2005 then highest!!!

The MCA for 15/16 is 8,355…

Minimum MCA is 3,220..

The spouse not entitled to claim the MCA may independently elect to claim half the …

Question 20

MCA and PAA and Child Q’s.

Answer 20

PAA

Net income 28,000

Gift aid donation gross 5

27795 - 27700 = 95

95/2 = 47.5 - 46

10660 - 46 EQUALS 10612…

MCA

36170 - (27700) = 8470

8470 / 2 = 4235 hence person 10600.

Then the excess 4235 - 60 = 4175 hence..

8355
Less
4175
4180.

Child

When’s doing the child’s question’s always remember to subtract the gross GIFT AID!!!