Last min revision Flashcards
When is taper relief given?
Gifts made more than 3 years before death. Over 3 years is 80% and over 4 is 60% etc
What is QSR
Reduces IHT if acquired by deceased in 5 years before death
QSR= tax charge on first transfer x (increase in transferee estate / diminution in transferor estate (total) x %
basically: Increase in estate= (full estate - lifetime tax)/full estate
What is business property relief?
o Relevant business property transferred, owned for qualifying period (2 years), transfer not part of contractual obligation to sell
100%= unincorporate trading business or partnership of one or shares in unquoted trading company
50%= shares from controlling holding (less than 50%) in quoted company or land/buildings/p&m
Top of proforma
What are the three tests to determine if someone is a UK resident?
Overseas test (UK less than 16 days- you are not)
Automatic UK residence test (Min of 183 in UK= resident)
Sufficient ties test (hardmans)
Refer to Hardmans for info on sufficient ties test.
How is domicile of origin acquired? What can later be acquired?
At birth: domicile of father if parents are married, otherwise mother.
Domicile of dependency (if person you are legally dependant on changes when under 16)
Domicile of choice (if over 16, you can change between countries if intention is shown to change permanent home and severs ties with previous domicile country such as reserving burial plot)
What defines deemed domicile for IT & CGT? What about IHT?
Resident for 15 out of 20 years in the UK or born in the UK and reside in the UK during tax year.
Domiciled in the UK at any time in previous 3 years.
What is the significance of domicile for IHT? What is the limit for UK dom to non-UK dom
If UK domiciled, charged on transfer of all assets; if non-UK domiciled, charged only on UK assets.
£325,000 (before NRB).
What is the remittance basis?
Only UK earnings taxed in the UK; overseas income taxed if brought into the UK.
What happens if you earn more than £2000 abroad and claim remittance?
Lose personal allowance, lose annual exempt amount on CGT.
What charges apply if opting for the remittance basis?
£30,000 if UK resident for 7 out of 9 years; £60,000 if UK resident for 12 out of 14 years.
What is the tax treatment for overseas aspects of CGT?
- Arising basis: Taxed on worldwide gains
- Remittance: Taxed only when proceeds are remitted (sent in payment/gifted)
What is the calculation method for disposal of UK residential property by non-UK residents?
- Proceeds - MV at April 2015 = Gain
- Alternatively: Proceeds - Cost = Gain
- Time apportion gain after April 2015
What applies to periods of non-residents for PRR?
Normal PRR applies if spent more than 90 nights in the property in the tax year.
