miscellaneous

Question 1

when is someone’s domicile deemed the uk?

Answer 1

• if they have been resident in the UK for at least 15 of the past 20 years

Question 2

when is the cash basis of accounting available?

Answer 2

• available to unincorporated business with receipts < £150,000
• taxable trade profits = cash receipts less expenses paid

Question 3

how should transitional profits be calculated?

Answer 3

1. Calculate the ‘standard part’
2. Calculate the ‘transitional part’
3. Deduct overlap profits from 2
4. Add together 1 and 3
5. Transitional profit is the lower of 3 and 4
6. Taxable profit = 1 + 0.2*5

Question 4

when can VAT relating to exempt supplies for the quarter be recovered?

Answer 4

• if it is less than £625 per month on average
• if it is less than 50% of total input VAT

Question 5

how is the recoverable amount of VAT calculated?

Answer 5

total taxable supplies/total supplies * non-attributable input VAT
- the fraction is rounded up to the nearest whole number

Question 6

what is the remittance basis charge?

Answer 6

• if individuals claim the remittance basis charge, they must pay a charge per annum:
  30,000 if resident for 7/9 tax years
  60,000 if resident for 12/14 tax years

Question 7

what are the exemptions for stamp duty?

Answer 7

• gifts
• divorce arrangements
• variations of wills
• intra group transfer if 75%+ of ownership

Question 8

what is a group relief group?

Answer 8

• when one company is a 75% subsidiary of another company or both companies are 75% subsidiaries of a third company
• qualifying losses can be surrendered to other members of that group but only if they are UK resident companies

Question 9

what is a chargeable gains group?

Answer 9

• where the principal company owns at least 75% of its direct subsidiaries and has an effective interest of more than 50% in each sub-subsidiary.
  -Each link has to have a minimum direct holding of 75%

Question 10

what are the implications of being in a chargeable gains group?

Answer 10

• assets transferred between members are at nil gain/nil loss

Question 11

what is a degrouping charge?

Answer 11

• when a company ceases to be part of a gains group within six years of a transfer there is a charge
• the charge is the gain which would have arisen when the asset was transferred
• the charge is added or taken away from the sale proceeds received on the disposal of the shares
• exempt if alongside SSE

Question 12

what is SDLT grouping?

Answer 12

an automatic grouping of 75%-related companies where no SDLT is payable for intra group transfers

Question 13

what are the standards for tax planning?

Answer 13

• client specific
• lawful
• disclosure and transparency
• advising on tax planning arrangements
• professional judgement and appropriate documentation

Question 14

what are the minimum amount of professional indemnity insurance required by firms?

Answer 14

• 2.5% of fee income if under 600,000
• otherwise 1.5mil

Question 15

when can structures and buildings allowance be claimed back?

Answer 15

from the in-use date

Question 16

when is the due date for a VAT return and payment?

Answer 16

one calendar month and 7 days from the end of the quarterly return

Question 17

how can losses be carried forward for corporations?

Answer 17

• any unused trade losses, NTLR deficits and property income losses can be offset against total profits of the following accounting period

Question 18

how is carried forward relief restricted?

Answer 18

deductions allowance: £5 million + 50% of excess profits over this amount

Question 19

what basis are sole traders assessed on?

Answer 19

• Accruals Basis
• Have to elect for cash basis and receipts must be less than £150k

Question 20

what basis is property income assed on?

Answer 20

• Cash basis unless receipts exceed £150k