INTRO To Income Tax Flashcards
What are the types of chargeable income?
Income from employment.
Income from trading.
Income from rent.
Income from investment such as interest on loans, bank and building society accounts.
Income from investment such dividends.
Income from taxable state benefits such as carers allowance and job seekers allowance and the state pension.
Income from other sources.
What are examples of exempt income?
- Interest on national savings certificates.
- Income from ISA’s.
- Betting, competition, lottery and premium bond winnings.
- Social security benefits such as housing benefits, PIP, child tax credit and universal credit.
- Scholarships.
- Income tax repayment interest.
- Apprenticeship bursaries paid to individuals leaving local care.
- Compensation payments made under cadets in screened such as the wind rush and post office process review.
What are the three types of income?
Non savings income.
Savings income.
Dividend income.
What is the personal allowance?
£12570
What are the income tax rates on savings?
First £37700 - 20%
Income between £37700 and £125140 -40%
Remainder over £125140 is 45%
If after personal allowance deduction, the tax payer has taxable income exceeding £5000, what is the nil rate band for savings?
Basic tax payer £1000
Higher tax payer - £500
Additional rate payer - £0
What are the savings rate taxes for different bands?
Up to £37700 after the nil rate - 20%
From £37700 to £125140 is 40%
Remainder over £125140 is 45%
What are the rates of income tax for dividends after the first £500 band of 0%?
Taxable income up to £37700 is 8.75%.
Between £37700-£125140 is 33.75%
Over £125140 is 39.35%
What are the conditions for something to qualify as gift aid?
- The donor must give the charity a gift aid declaration. In writing or by telephone.
- The donor must pay an amount of income or capital gains tax which is at least equal to the amount of gift aid the charity will reclaim in the tax year in respect of the donors donation .
- The charity must be located in the UK.
What amount is the marriage allowance?
£1260
What are the exempt benefits?
Contributions by an employer to a registered pension scheme.
Trivial benefits, capped at £300 pa in total when provided to certain directors.
Pension advice and associated tax planning up to £500.
Childcare facilities run or on behalf of the employer.
One mobile phone.
Free or subsidies meals in a canteen where such meals are available to all staff.
Annual social events up to £150 including VAT per tax year. If the costs more than £150 then the whole amount is taxable.
Provision of parking spaces.
Use of bicycles.
Non cash long service awards, not exceeding £50 per year of service.
