L1 -SIMPLE Flashcards
What are the four main UK taxes covered in Revenue Law Lecture 1?
Income Tax, Capital Gains Tax, Corporation Tax, Inheritance Tax.
What does Income Tax apply to?
Wages, business profits, rent, savings interest, dividends.
When do you pay Capital Gains Tax?
When you sell a valuable asset (like a house or shares) and make a profit.
What is Corporation Tax?
A tax on the income and capital gains of companies.
What does Inheritance Tax apply to?
The estate of a deceased person, including gifts made before death.
What’s the difference between capital and income?
Capital is what you own (tree); income is what it produces (fruit), like rent or interest.
What’s a capital receipt?
Money received from selling a capital asset (e.g., land); may be taxed as capital gains.
What’s an income receipt?
Money received from labour or investments (e.g., wages or interest); taxed as income.
What is capital expenditure?
Spending money on fixed capital assets (e.g., machines); usually not tax deductible.
What is income/revenue expenditure?
Spending on things like stock or materials; may be deductible from taxable income.
What’s the difference between fixed and circulating capital?
Fixed = stays in business long-term (machines). Circulating = sold/used quickly (stock).
What if an asset doesn’t clearly fit fixed or circulating capital?
Courts decide which it’s more like — “in the nature of” fixed or circulating.
What happens if it’s unclear whether something is income or capital?
Tax authorities can issue alternative assessments until it’s resolved.
