Self Test Questions Flashcards

1
Q

A self employed person who has been in business for several years prepares annual accounts to 31st August each year. The profits of which period are taxed in 2020/21?

A

1st September - 31st August 2020

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2
Q

Is the personal allowance deducted in calculating total income?

A

No

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3
Q

Is the interest paid on a loan to purchase a house a deduction from total income?

A

Not for residential use, landlords can claim tax relief on interest payments up until the current tax year

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4
Q

Amy has been at ABC plc for 21 years. She has been awarded a cash bonus of £12000 for submitted an idea to her manager that will save the company a substantial amount of money. She has also been given a non cash long service award of £1050.

What would be the income tax treatment of the two awards?

A

She would be taxed on the cash bonus as it is over £5000, the first £5,000 would be tax free subject to it not being more than 50% of the financial benefit or 10% over 5 years and the idea is implemented

She would not be taxed on the long service award as it falls within £50 per year of service

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5
Q

What special tax allowances do children get?

A

No special allowances
Has a full personal allowance
Can benefit from the 0% on £5,000 savings

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6
Q

Are interest in possession trustees liable to higher rates and additional rates of tax on income received?

A

No

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7
Q

How much income is taxed at standard rate for trustees of a discretionary trust, assuming the settlor has only set up one trust?

A

£1000

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8
Q

The Elliott family discretionary trust receives rental income of 20/21 of £14,000. Property expenses amounted to £2,000 during the year.
There are not trust expenses and the trust has a standard rate band of £500 because the settlor created another similar trust.
Calculate the amount of net income payable to the beneficiary Lucia if the trustees decide to pay the income during 20/21.

A

£14,000 - £2,000 = £12,000

£500 taxed at 20%
£11500 taxed at 45%

Tax liabilty £5725
Net income £6725

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9
Q

At what rate of tax are discretionary trustees taxed on dividend income for the tax year 20/21?

A

7.5% for the first £1,000, then 38.1% thereafter

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10
Q

What are the main Acts containing the income tax legislation?

A

The Income tax Act 2007, the Income tax (earnings and Pensions) Act 2003, and the Income tax (trading and other income) Act 2005

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11
Q

To what date or dates may property income accounts be drawn up for tax purposes?

A

5th April or 31st March

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12
Q

Under what legislation are a self employed person’s profits taxed?

A

ITTOIA part 2

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13
Q

What did Pepper vs Hart (1992) decide?

A

That the taxable benefit for an employee on in-house benefits provided by an employer is based on the marginal cost only.

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14
Q

If an employer provides a beneficial loan to an employee, what is the basic benefit for tax purposes?

A

The difference between the interest at the official rate and the actual interest paid

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15
Q

An employer purchased a property for £120,000 in 2018 and spent £13,000 on improvements during 2019. From 1 January 2020 onwards, the property was let to a senior employee for an annual rent of £3,000.
The property as an annual value of £5,600.

Calculate the taxable benefit for 20/21

A

Basic benefit £5,600 - £3,000 = £2,600

Additional benefit £58,000 (£120,000 + £13,000-£75,000) at 2.25% = £1,305

Total benefit £3,905

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16
Q

Can a french national currently claim UK personal allowances?

A

Yes (France is part of the EEA)

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17
Q

How much of the personal allowance can be transferred to a spouse or civil partner for 20/21?

A

£1250 (10% of the personal allowance of £12500 for 20/21)

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18
Q

In what way is higher and additional rate tax relief for pension contributions paid net?

A

By extending the basic and higher rate tax bands by the amount of the gross payment

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19
Q

When is a trust subject to UK income tax?

A

When it has at least one trustee who is resident in the UK

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20
Q

Are trustees entitled to a personal allowance for trust income?

A

No

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21
Q

What is the current rate of tax applicable to discretionary trusts for savings interest?

A

20% within the standard rate band, then 45%

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22
Q

What is the rate of tax applicable to discretionary trusts for savings income in excess of any standard rate band?

A

45%

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23
Q

If a father sets up a trust for his eight year old son that generates £150 income, who is taxed on this?

A

The father is taxed on the full £150

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24
Q

Who has to pay class 1 NIC’s?

A

Employee’s and employers

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25
Q

Simon is both employed and self employed. For 20/21 he will pay class 2 NIC’s of £158.30 class 4 of £2295 and class 1 of £1860. What amount of class 4 NIC’s will actually be due?

A

£1785 (£3645 - £1860)

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26
Q

On what are class 4 NIC’s charged?

A

Taxable profits of a self employed individual

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27
Q

Edward is self employed. For the past few years Edward’s profits have been around £6000. However for 20/21 profits will increase to £30,000. How will this profit increase affect Edwards class 2 NIC’s?

A

Edward will now have to pay class 2 NIC’s because his profit for 20/21 will exceed the small profits threshold

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28
Q

What earnings period is used when calculating NIC’s for company directors?

A

NIC’s for company directors are calculated using an annual earnings period

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29
Q

What is the maximum NIC’s per year at the main rate for an employee?

A

£4860 (£50000-£9500 at 12%)

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30
Q

What is the relevance of the UST as regards calculating NIC’s?

A

The UST establishes the upper level of earnings that can benefit from the 0% rate when calculating employers contributions for employees aged under 21

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31
Q

Is the benefit of having a company car subject to class 1 NICs?

A

No, since this is not something that can be easily converted to cash. However most fringe benefits are instead subject to employers class 1A NIC’s

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32
Q

An employer pays its Class 1 A NIC’s for 20/21 electronically. What is the due date?

A

22nd July 2021

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33
Q

Does an employee have to pay NIC’s on vouchers redeemed for cash?

A

Yes

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34
Q

What are the rates of employees NIC’s?

A

12% and 2%

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35
Q

What are the weekly primary contribution threshold and upper earnings limit for NIC employees?

A

£183 and £962

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36
Q

Does an employer have to pay NIC’s on the benefits of a company car?

A

Yes

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37
Q

Why can directors not reduce NIC’s by paying the whole of their annual fee in one week?

A

Because they have an annual accounting period

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38
Q

What are the maximum NIC’s per year at the main rate for an employee?

A

£4860 (£50,000 - £9,500 at 12%)

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39
Q

Which class of NIC’s payable by self employed people confers entitlement to benefits?

A

Class 2

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40
Q

Why might an individual choose to pay class 2 NIC’s voluntarily?

A

This may be advisable to maintain the contribution record for State benefits, especially the new State pension

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41
Q

How much is the class 2 contribution?

A

£3.05 per week, if earnings over £6,475 per year

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42
Q

What are the class 4 contribution rates?

A

9% on profits to £50,000, 2% on any excess over £50,000

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43
Q

When are class 4 NIC’s payable?

A

In two payments on account 31st Jan in the tax year of assessment and 31st July following the end of year tax assessment, with a balancing payment or repayment on the following 31st Jan

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44
Q

When someone is both employed and self employed, what is the annual limit on class 4 NIC’s payable at the main rate?

A

Maximum class 4 NIC’s at the upper earnings limit £3,645 less the main rate class 1 NIC’s paid

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45
Q

Why might someone pay class 3 NIC’s?

A

To top up contribution record to increase entitlement to benefits

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46
Q

Is CGT charged on death?

A

No

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47
Q

What is the valuation basis for a gift for CGT purposes?

A

The market value

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48
Q

Wendy and Walter are married and have both used their annual exempt amounts for 20/21. They now wish to sell a jointly owned antique. What is the maximum disposal value for a chattel for it to be exempt from CGT?
How is the chargeable gain calculated if the proceeds exceed this exempt amount?
What would be the chargeable gain if any, if the antique were sold for £11,500

A

The maximum disposal value is £6000. Where the disposal proceeds exceed £6000 the chargeable gain cannot exceed five-thirds of the excess over £5000. a sale for £11,500 would be completely exempt as each spouse has a chattel exemption of £6000.

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49
Q

What is the chargeable rate of CGT when a chargeable gain qualifies for business asset disposal relief?

A

10%

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50
Q

Which shares are included in the share pool?

A

All acquisitions except those made on the same day or the following 30 days

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51
Q

How many discretionary trusts would have to have been set up by a single settlor since 6 June 1978 if the annual exemption for each trust in the tax 20/21 is £1537.50?

A

Four

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52
Q

The trustees of the Smith Trust sell one of its rental properties (commercial not residential) on 4th May 2020 for £350,000. The property was bought on the 19th March 2008 for £260,000. Mr Smith has created two other trusts since June 1978.

  1. Calculate the CGT payable for 20/21
  2. state when this is payable to HMRC
A
1. Because of the two other trusts, the exemption is reduced to £2.050 giving a taxable gain as follows: 
Proceeds £350,000
Less Cost £260,000
Chargeable gain £90,000
Less annual exemption £2,050
Taxable gain £87,950
CGT Due at 20% £17,590
  1. CGT liability is payable on 31st January following year, i.e. Jan 2022
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53
Q

What is the base date for CGT?

A

31st March 1982

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54
Q

What is the broad definition of disposal?

A

Any transfer of ownership or derivation of a capital sum from an asset

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55
Q

Can CGT on a sale of a business be paid in instalments where part of the consideration is payable three years after the sale and the amount depends on the business profits?

A

No. Only part of the consideration is contingent and so an estimate of this must be included along with the non contingent element.
There will be a separate chargeable gain in three years time is the actual consideration received then is higher than the estimate

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56
Q

Name three assets that are exempt from CGT?

A

Principle residence
Private motor vehicle
Government bonds

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57
Q

Can a capital loss be carried forward to future years?

A

Yes

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58
Q

What are the rates of CGT?

A

10% and 20% with higher rates of 18% and 28% applicable to residential gains. A rate of 10% also applies if business asset disposal or investors relief is available

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59
Q

What is the maximum amount of chargeable gains that can quality for business asset disposal relief in respect of disposals made during 20/21?

A

£1 million assuming no previous disposals have been made

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60
Q

In holdover relief available on a fathers gift of a house to his 25 year old daughter?

A

No

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61
Q

Specify for CGT reliefs

A
Four out of:
Business asset disposal
Investors
Holdover
Rollover
Rollover on incorporation
EIS reinvestment
SEIS reinvestment
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62
Q

When is CGT in respect of the disposal of shares due?

A

31st Jan following the end of the tax year in which the gain is made

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63
Q

What is the annual CGT exemption for a trust for 20/21 where the settlor has only set up one trust?

A

£6,150

64
Q

Who is taxable on chargeable gains made by a trust?

A

The trustees, unless it is a bare trust or a trust for vulnerable beneficiaries

65
Q

At what rate are the trustees of an interest in possession trust charged CGT?

A

20% unless the property is not subject to PPR exemption, then 28%

66
Q

At what rate are trustees of a discretionary trust charged CGT?

A

20% unless the property is not subject to PPR exemption, then 28%

67
Q

What is the current IHT nil rate band?

A

£325,000

68
Q

How long does a PET donor have to survive for the gift to be fully exempt?

A

Seven years

69
Q

Alison died on 1st May 2007 leaving her estate to her husband Angus.
Alison’s only lifetime gift was £30,000 to her sister in July 2005 (NRB for 2007 was £300,000).
Angus made a gift of £400,000 to his son on 1st August 2016, and a further gift of £400,000 to his daughter on 1st Oct 2020, and his estate is valued at £450,000.
This is left entirely to the children.
Calculate the amount of IHT payable in respect of Angus’s lifetime gifts (ignoring exemptions) and his estate (ingore RNRB)

A

Alison did not use 90% of her NRB
Therefore the NRB available is £617,500 (£325,000 x 190%)
£617,500 minus son’s gift = £217,500 remaining for use against the daughter’s gift
Gift between 3/4 years before death, therefore taper relief applies of 20%
£400,000 - £217,500 = £182,500 at 40% = £73,000 x 20% = £58,400
Remaining estate £450,000 x 40% = £180,000 IHT

70
Q

Can shares qualify for business relief?

A

Yes

71
Q

How long does a gift with reservation stay in the donor’s estate?

A

As long as the donor retains a benefit in the property

72
Q

In January 2015, Joe made a gift of a holiday cottage to his daughter. At that time, the cottage was valued at £200,000. Joe continued to use the cottage for holiday purposes until his death in Sept 2020 at which time the cottage is valued at £215,000. Joe did not make any other lifetime gifts.
How will this gift have been treated for IHT purposes during Joe’s lifetime and on his death if:
1. He paid market rent
2. No rent was paid

A
  1. If rent is paid the gift is a PET, reduced by 2 x annual exemptions of £3,000
    As Joe did not survive for seven years the NRB would be reduced by £194,000 (200,000 - 2 x 3000)
  2. If no rent was paid, it would be a gift with reservation and the cottage would be included in Joe’s estate at the value of £215,000
73
Q

Can a gift with reservation give rise to POAT?

A

No

74
Q

Which transfers have to be grossed up?

A

Lifetime transfers where the transferor pays the tax

75
Q

Who is liable for IHT on a deceased person’s estate and when is the due date for the tax?

A

The legal representatives, six months after the end of the month in which death occurs

76
Q

How will most trusts created on or after 22nd March 2006 that create flexible interest in possessions be treated for IHT purposes?

A

As chargeable lifetime transfers

77
Q

Jim sets up a discretionary trust in Aug 2020 for his grandchildren for £860,000. He had a full NRB available but he had already used up his annual exemptions to date.
Calculate the amount of IHT payable on setting up the trust:
a) if the trustees paid the liability
b) if Jim paid the liability

A

Using the rates for 20/21
a) trustees pay tax
£860,000 - £325,000 = £535,000
£535,000 x 20% = £107,000

b) if Jim paid the tax, the transfer would be grossed up
£535,000 x (100/80) x 20%

78
Q

Jarrah sets up a discretionary trust in August 2010 for his grandchildren for £860,000. The trust is valued at the ten-year anniversary at £1.1M. Calculate the amount of IHT payable on the ten-year anniversary.

A

First calculate the hypothetical transfer and effective rate to calculate the periodic charge

£1,100,000 -£325,000 = £775,000
£775,000 x 30% = £46,500
£46,500 /1,100,000 = 4.2273% effective rate
The charge is £1,100,000 x 4.2273% = £46,500

79
Q

What type of transfer value is involved for IHT purposes where an interest in possession trust is created on 15th April 2016?

A

A chargeable lifetime transfer

80
Q

Where is the IHT legislation found?

A

The IHT Act 1984

81
Q

How many rates of IHT are there?

A

40%
20%
0%

But there is a 36% rate if more than 10% of the estate is left to charity

82
Q

Are non-UK domiciled individuals subject to IHT?

A

Yes, if they have UK assets

83
Q

Is a UK domiciled individual liable to IHT on property siutated in Spain?

A

Yes

84
Q

What is a transfer value?

A

Any disposal whereby the value of the estate immediately afterwards is less than it would have been if it had not been made

85
Q

Are all gifts to a spouse or civil partner exempt?

A

No - maximum exemption of £325,000 if the recipient is domiciled outside the UK

86
Q

What is the current annual exemption?

A

£3,000

87
Q

What is the exemption limit for a wedding gift from a groom to a bride?

A

£2,500

88
Q

Give an example of a CLT

A

A gift to a discretionary trust or any other type of relevant property trust

89
Q

Does a gift with reservation count as a gift when it is made?

A

Yes

90
Q

What type of IHT transfer is the creation today of an interest in possession trust?

A

A CLT

91
Q

On what three occasions could IHT be charged on a discretionary trust?

A

On establishment of the trust - this is a CLT
There is a periodic charge every 10 years
There is an exit charge on distribution of the trust fund (or part) to beneficiaries

92
Q

Are accumulation and maintenance trusts, set up during the settlors lifetime and after 5th April 2008 subject to exit charges?

A

Yes

93
Q

Andrew left the UK on 15th June 2020 to stay with his parents in Germany, returning to the UK on 31st December 2020. He has previously been resident in the UK and is retired, and his only home is in the UK. What is Andrew’s residency status for 20/21?

A

Andrew is not automatically non-resident in the UK because he has previously been UK resident and does not meet the fewer than 16 days test. Although Andrew is in the UK for less than 183 days, he will be treated as UK resident because of his UK home

94
Q

In what circumstances will an individual’s residence status be determined according to the sufficient ties test?

A

When an individual’s residence status cannot be determined according to any of the automatic tests

95
Q

What types of domicile are there?

A

Domicile of origin, domicile of choice and deemed domicile

96
Q

Can a non UK resident be subject to capital gains tax?

A

Yes, if non residence lasts for a period of five years or less, if property situated in the UK is disposed of, or if the non resident is carrying on a trade or profession through a branch or agency in the UK, disposes or assets used in that branch or agency

97
Q

How will an individual who does not complete the non residence pages of their self assessment tax return be treated for tax purposes?

A

An individual who does not complete the non residence pages will be treated as resident and domiciled in the UK, and must declare worldwide income and gains

98
Q

What is the object of a double tax treaty?

A

To reduce the total tax payable where one transaction would produce a tax liability in two different countries

99
Q

What is residence for tax purposes?

A

The status of an individual in any given tax year

100
Q

Will an individual who spends fewer than 30 days in the UK each tax year be automatically not resident in the UK?

A

Yes, as an individual can stay up to 45 days in a tax year if they have not been resident for any of the previous 3 years

101
Q

What counts as a day in the UK for residence purposes?

A

Any day where a person is present in the UK at midnight

102
Q

Can a person who leaves the UK to retire overseas, but retains their UK home, qualify for the split year treatment?

A

No, because the split year treatment for a person leaving the UK to live overseas must involve ceasing to have a UK home

103
Q

How is a person’s residency status determined under the UK sufficient UK ties test?

A

Residency for a particular tax year is determined by comparing the number of days a person has spent in the UK against how many UK ties they have

104
Q

For which taxes is deemed domicile relevant?

A

Income tax, CGT and IHT

105
Q

Can a UK domiciled individual be taxed on the remittance basis?

A

No, the remittance basis is only available to persons non UK domiciled

106
Q

Are no UK domiciled, non UK residents subject to IHT on UK assets?

A

Yes

107
Q

How does an individual claim non residence status?

A

By completing the residence pages of self assessment

108
Q

Jane paid tax of £28,000 for 19/20 and the total amount of tax due for 20/21 will be £33,000. What is the amount of Jane’s balancing payment for 20/21 and when will this be due?

A

£5,000 - £33,000 less payments on account totalling £28,000 due by 31st Jan 22

109
Q

Joe pays his balancing payment for 20/21 on 7th Aug 22. what penalties will be due?

A

The due date was 31st Jan 22, so there will be a penalty of 5% of the tax underpaid at 3rd March 22, with a further penalty at 3rd Aug 22

110
Q

What are the due dates for payment of tax under self assessment?

A

31 Jan in the tax year and the following 31 July, balance 31 Jan following

111
Q

When must a full payment submission be made?

A

Normally either before employees are paid or at the time of payment

112
Q

What is the purpose of a PAYE code?

A

The PAYE code is designed to deduct the correct amount of tax from the employees pay so that the employee does not usually need to complete a tax return

113
Q

Do employees generally have to pay tax under self assessment?

A

No

114
Q

On what date is CGT due for 20/21 (except for CGT on UK residential property disposals) payable?

A

31st Jan 222

115
Q

What is the initial penalty for not sending in your tax return by the deadline?

A

£100

116
Q

What must the employer do with the tax and NIC’s deducted from employees pay?

A

Pay it over to HMRC monthly or quarterly for small employers

117
Q

What are the main items shown on a P60?

A

Details of total pay, income tax deducted or refunded and NIC details for the tax year

118
Q

What is tax evasion and is it legal?

A

Failing to provide full and accurate information to the taxing authorities. It is not legal.

119
Q

What input VAT cannot be reclaimed?

A

Motor cars unless bought wholly for business purposes and most business entertainment

120
Q

At what level of taxable turnover are traders allowed to register for VAT?

A

Any level of turnover.

121
Q

Which supplies are taxable supplies?

A

All supplies are taxable apart from those that are specifically exempt

122
Q

When can the flat rate scheme be used?

A

A business must have a turnover of no more than £150,000

123
Q

How does a trader with an annual turnover exceeding £2M claim VAT for a debt where the customer has not paid?

A

Traders can claim back bad debt relief for debts more than 6 months old (but no more than 4 years and 6 months) provided they have been written off in the books

124
Q

For how long can a trading loss be carried back?

A

The preceeding 12 months

125
Q

A company’s account period is the year ended 30th Sept 20. It is not a large company. By what date must the company pay its corporation tax liability and file its return?

A

on or before 1st July 21 and tax return is due 30th Sept 21. Qaurterly instalements are not due because the company is not large

126
Q

A shareholder received a dividend of £3,000 in 20/21. Assuming this is their only source of dividend inceom, calculate the shareholders individual tax liability in respect of the dividend income if:

a) there is no other income
b) there is other income of £20,000
c) there is other income of £60,000?
d) there is other income of £170,000?

A

a) nil as the income is covered by personal allowance
b) £75. £2,000 is tax free, £1,000 at 7.5%
c) £2,000 is covered by dividend allowance, 32.5% on remainder. £325
d) £2,000 uses dividend allowance. £1000 at 38.1% £381

127
Q
A company has the following shareholders
Mr A 24%
Mrs B 15%
Mr C 4%
Mrs C 3%
Mrs D 3%
Mr E 2%
None of the other shareholders hold more than 1%.  Is this a closed company?
A

The company is not under sole control of its directors as total shareholdings add to 39%
The five largest total 49%, Mr and Mrs C count as one. Therefore the company is a close company

128
Q

For 2020/21 what is the maximum amount that can be contributed to a pension scheme for a member and what contributions count towards this limit?

A

£40,000 of relevant UK earnings. Contributions by the employer and employee count

129
Q

If John aged 40 invests £4000 into a cash ISA on 24th April 2020 and does not have a stocks and shares ISA, how much more can be invested into the cash ISA within the tax year?

A

£16,000

130
Q

What rates of tax are payable on savings income?

A

0%, 20%, 40%, 45%

131
Q

When does the chargeable event gain arise where regular part surrenders are being taken at 6% per year?

A

On the last day of each policy year

132
Q

Are UK investors liable to income tax on gains on offshore policies?

A

Yes

133
Q

When will the settlor be treated as the person chargeable as regards a life insurance policy held in trust?

A

When the settlor is alive (or the event ocurred before their death) and UK tax resident immediately before the event

134
Q

Isabella placed £400K into a discretionary trust three years ago. What rate of IHT will be payable if she now takes out a life policy under a new interest in possession trust?

A

20%

135
Q

What rate of interest applies to a POAT?

A

2.25%

136
Q

Can a widget manufacturer that owns its factory quality under the EIS or SEIS?

A

Yes, under both

137
Q

What is the maximum investment into a VCT eligible for income tax relief?

A

£200,000 per tax year

138
Q

What age must a person be in order to invest in an ISA?

A

16 for a cash ISA, 18 for others

139
Q

How long must a child trust fund usually be held and who is then entitled to withdraw the funds?

A

Until the child’s 18th birthday, the child is entitled

140
Q

Can an investment in a cash ISA be transferred to a stocks and shares ISA?

A

Yes

141
Q

What tax is paid when an investment in a reporting fund is cashed in?

A

CGT at a rate of 10% and or 20%

142
Q

Is a policy loan at a commercial rate of interest a chargeable event on a non qualifying policy?

A

Yes

143
Q

What percentage of a single premium can be withdrawn each year free of tax at the time?

A

5%

144
Q

What is the maximum rate of tax liability on a chargeable gain on a UK life policy for an individual under 65 and with taxable income of less than £100K?

A

20% (40% - 20%)

145
Q

How is a purchased life annuity taxed?

A

The interest element is taxed as savings income and the capital element is tax free

146
Q

Who gets charged to any tax due under a chargeable gain on a trust policy if the settlor is dead?

A

The trustees if one or more is UK resident, or a beneficiary if UK resident but only when they are receiving benefit from the trustees

147
Q

What exemptions are commonly used to cover regular premiums on trust policies for IHT?

A

Annual and normal expenditure exemptions

148
Q

Which annuities are split into capital and interest contents for tax purposes?

A

Purchased life annuities and purchased annuities certain

149
Q

What rate of income tax relief is given on a SEIS share investment?

A

50%

150
Q

What is DOTAS?

A

Disclosure of tax avoidance schemes

151
Q

Fred is a higher rate taxpayer and wants to save some tax on his income by transferring some of his savings to his wife Maggie who is a basic rate taxpayer. He would like to lend her the money just in case he decides to leave her. Would this be effective tax planning?

A

This approach is unlikely to mean that the income will be taxed on Maggie rather than Fred.

152
Q

Joe is ten years old and his mother has made a gift of some cash to him that has generated income of £50 in last tax year. She has not given him any other investments. How will the income be taxed?

A

It will be tax free

153
Q

What is the main reason why a shareholder director of a company might want to draw a dividend instead of a salary?

A

There are no NIC’s on dividends

154
Q

How can a higher rate taxpayer achieve an effective rate of 45% tax relief on a pension contribution?

A

The basic rate tax band of the higher rate taxpayer with dividend income is extended by the amount of the gross pension contribution

155
Q

Why might leaving assets that qualify for business relief and agricultural relief to a husband or wife be ineffective tax planning?

A

Because the reliefs could be reduced or wasted as a consequence of an inter spouse transfer exemption

156
Q

Can a settlor also be a trustee and why might it be desirable in many cases?

A

Yes, it would allow the settlor some ongoing involvement and control without sacrificing the IHT savings