Investment Taxation Flashcards
What is the Tax treatment of rental income?
Rental income treated as investment income (Not “earned income).
Unless substantial services provided (house keeping etc) e.g. is a Business
How is Rent-a-room relief Taxed?
£7,500 gross is tax free. Any above attracts taxation (income).
No deductions for expenses etc allowed.
1 per household.
Qualifies for Furnished holiday lettings?
(Quick Fire x7)
- Located in UK or EEA
- Furnished
- Let on commercial basis
- Available for 210 days per tax year
- Let for 105 days per tax year
- May be let for continuous periods of more than 31 days, but not more than 155 days in a tax year
- Does not need to be in holiday resort
Tax advantages of Furnished holiday letting?
Treated as Trading Income e.g. allowed for Pensions / Losses
CGT Rollover and BADR available as treated as a business
How is Woodland treated in tax?
Profits exempt from income tax
IHT postponed if used for timber etc
Commercially managed woodlands exempt from CGT
ISA eligibility and conditions?
- Individual contracts only (no joint ISAs)
- UK resident or non-UK resident Crown employees working overseas (or their spouse/ civil partner).
- On becoming non-resident, no further contributions can be made, but the tax benefits can be kept.
- Can only invest in one provider per ISA type per tax-year. Though can set up different ISA types with different provider.
How are Offshore funds treated for in tax?
- Taxed on encashment only.
- Gain is calculated on CGT principles - no CGT Annual Allowance
- Tax is charged at income tax rates
- PSA and DA do not apply.
- Divs received by offshore funds may be subject to non-reclaimable withholding tax.
- Some countries levy a small tax charge on offshore funds.
What are Top-Slicing Relief basic steps?
Calculate Gain
Gain / Policy Years
Income + Gain compare to Tax Bracket
Apply correct tax to withdrawal
