Revision areas

Question 1

Are FYA avaliable to individuals?

Answer 1

No, this is a company benefit

Question 2

How is a long life asset treated?

Answer 2

Special rate pool

Question 3

1. How are cars with > 50g emissions/km treated for capital allowances?
2. How are cars with < 50g emissions/km treated for capital allowances?
3. Can AIA be used against cars?

Answer 3

1. Special rate pool
2. Main pool
3. No

Question 4

1. Can an individual have a POA for tax purposes > 12m?
2. How can much overlap profit can an individual relieve on a long POA?
3. How much overlap profit can an individual relieve on cessation?

Answer 4

1. Yes
2. Overlap profit/months of overlap * months of POA over 12m
3. Any remaining overlap profit can be relieved on cesation. It is not limited to months of POA over 12m

Question 5

If an individual makes a trading loss of 12,000 in the year, what figure should be entered for Trading Income in the Income tax computation?

Answer 5

Nil

Taxable trading income for the year in which a loss arises is always nil - NOT the amount of the loss

Question 6

For individuals:
1. What is the opening years loss relief?
2. What are the CY/CB rules?
3. What are the c/f rules?
4. What are the loss relief on cessation rules?

Answer 6

1. If losses arise in first 4 years of trade, they can be carried back for 3Y on a FIFO basis, set against gross income, before PA. All or nothing claim.
2. Losses set against general income in current year, then prior year. Remainder is carried forward against first avaliable future trading profits of the same trade
3. Losses can only be carried forward against first avaliable future trading profits of the same trade, not against any other income, before PA. All or nothing.
4. Loss of the last 12m of trading can be carried back against trading income of the final four tax years. Need to split 12m between loss in penultimate tax year and loss in last tax year. If loss in penultimate tax year is positive, use nil. Overlap profits unused increases the loss to carry back

Question 7

What are the special CGT rules for cars?

Answer 7

Cars are exempt from CGT

Question 8

What are the special CGT rules for losses made on disposals to a connected person?

Answer 8

Loss is restricted to gains made on disposals to same person

Question 9

How are landlords & people disposing of property penalised by CGT rules?

Answer 9

28% CGT on investment property/second homes
CGT payable w/in 60 days rather than 1 year from 31 jan following disposal (normal date)

Question 10

How should salaries to a sole trader be treated when calculating taxable trading profits?

Answer 10

Added back - this is an appropriation of profit and a disallowable expense

Question 11

How does an employee get tax relief for donations made to charity under a payroll givign scheme?

Answer 11

Theseare deducted from employment income when calculating income tax