Tax Flashcards
3 Taxable NS&I products
Direct saver
Income bonds
Investment account
6 tax free NS&I products
Direct ISA
Junior ISA
Premiums bonds
Fixed interest savings certificates
Index linked savings certificates
Children’s bonds
Index linked GILT income and gains tax rules
Income is taxable
Gains are CGT free
Repo market
Market for selling all ready owned GILTS
Stamp duty tax on shares
0.5% of purchase price then rounded to next £5 for paper then to the nearest penny for paperless
Panel on takeover merged levy
Flat £1 fee on all trades (both purchases and sales) of £10k or more
Dividend allowance
£2k
Dividend tax bands
Basic rate tax payer - 8.75%
Higher rate tax payer - 33.75%
Additional rate tax payer - 39.35%
SDLT threshold and charge on rentals
£125k for resi. and £150k for commercial rent received over term of lease. Then charges 1%.
SDLT additional charge for BTL or second home
Additional 3% on purchases over £40k
Additional charge of SDLT for non UK resident
Additional 2% for purchases over £40k
Rent a room relief 2 options for declaring tax
Declare costs as standard and claim back expenses
OR
Claim rent a room relief and the first £7,500 is tax free but then taxable above this and now expenses can be claimed for
How is a unit trust taxed regarding CGT?
No CGT for fund but CGT due for investor
Unit trust taxation and OEIC rules - what is a equity fund and non equity fund
Equity fund - Less than 60% of its assets in interest bearing securities
Non equity fund - Over 60% of assets in interest bearing securities
For a trust fund how is an equity fund and non equity fund taxed regarding corporation tax?
Equity - taxed at 20% on interest income received
Non equity - fund itself suffers corporation tax at 20% on interest but relievable for the investor
Dividend tax for tax brackets
Additional - 39.35%
Higher - 33.75%
Basic - 8.75%
Equalisation payment
Partial refund of capital invested into a trust, so is not subject to income tax
Do authorised unit trusts pay CGT?
No they’re exempt, they pass this to the unit holders
When is there an 8% CGT surcharge?
For second properties
Annual CGT exemption
£12,300
What is bed and breakfasting regarding CGT?
Selling and buying an asset within a short space of time to avoid CGT liability
Any sale and repurchase of the same asset is ignored for CGT purpose when done within how many days?
30 days
How are investment trusts taxed?
Same as equity unit trusts
What are the qualifying rules for a policy to make it a qualifying policy?
-min 10yrs
- Premiums must be paid atleast annually and cannot exceed double price of any other year and cannot be more than 1/8 of total premiums paid annually
- contributions a max. of £3,600
- surrendering the policy within 10yrs makes it non-qualifying
