Principles of Income Tax Flashcards
1
Q
What income is exempt from tax?
A
ISA Gambling / Lottery Premium bonds Most social security benefits Interest on NS&I savings Interest on SAYE (Sharesave accounts) Statutory redundancy pay Interest on delayed income tax repayments Scholarships and educational grants Damages received on injury or death.
2
Q
What is grossing up?
A
Some income is received net of tax…
400 * 100/80 = 500 (+20%) Income tax
200 * 100/90 = 222.22 (+10%) Dividend tax
3
Q
What is taxable income?
A
Employment income, property income, interest, dividends.
