taxation Flashcards
self assessment tax return deadline for the year
- 31st october same year for a paper return submission
- 31st january the following year if submitted online
+ deadline for any payment of tax due
self employed paying less than 80% of last years income tax at source
- pay 31st of january in the tax year
- pay 31st of july following end of tax year
automatic oversees resident: 1. first overseas test
2. second overseas test 3. third ….
1) present in uk for less than 16 days in current fiscal year
2)not present for last 3 fiscal years, present in uk for 46 days in current fiscal year
3) work full time oversees, spend fewer than 91 days in uk, no more than 30 days spend working in uk
automatic uk resident: first, second, third resident test
1) present in uk for at least 183 days in a fiscal year
2) their only home is in uk: available for use 91 days or more and used for at least 30 days
3) work full time in uk
sufficient ties test
- family
- accommodation
- work
- 90-day tie
domicile :
origin
choice
deemed domicile
- acquired from mather or frather
- applies form age 16, leave country of domicile and settle in another country
- individual is resident in the UK for 15/20 consecutive years
residence and domicile
1. uk resident and domiciled
2. uk resident but non-uk domiciled
3. overseas resident
- taxable on their worldwide income as it arises (not have ot be remitted in uk )
- uk income taxable as it arises , foreign income (<2000 automatic remittance basis, >2000 choice between arising basis or remittance basis)
- taxable on uk income as it arises and overseas income not subject to uk tax
if remittance basis is chosen
- lose income allowances
- charge made at the following rates:
- 7/9 = £30,000 pa
- 12/14 = £60,000 pa
- 15/20 deemed domicile
taxable income:
1. non-savings income
2. savings income
3. dividend income
- income from work, pensions, social security benefits
profits from self-employment, profits from partnership
profits from property business (rent or investment into PAIF/REIT) - interest from bank, building societies, bond interest (including gilts) and debentures, income portion of purchased life annuity
- distributions to owners of company shares
income generated by capital gifted to a child under 18 ezceeding £100 pa will
be taxed as if its parents own income
starting rate band
if combined non-sabings income and savings income is below or at £17,570 then 0% taxed. if non savings income above annual personal allowance then reduced by £1 for every £1 above
NICS employees, employers, self employed
- pay class 1
- class 1a (on tax benefits e.g. company car) and 1b (PAYE income)
- class 2 (flat rate) class 4 ( variable rate)
taxation of trust
£1000 @ SRT
- 20% savings and property income
- 8.75% for dividends
>£1000 @ trust rate
- 45% savings and property income
- 39.35% for dividends
Bare trust
- taxed at individuals marginal rate
a settlor with 2 trust have a standard date band of
£500 in EACH trust
trusts CGT annual exemption
£6150
cgt applies to
Uk resident : worldwide gains
CGT exampt assets
- primary residence
- betting and lottery wins
- currency bought for holidays
- national savings certificate and premium bonds
- private motor car / classic cars
- life assurance policies
- gitls and qualifying bonds
- gifts to charity
- gifts to spouse
CGT liable assets
- company shares and non-qualifying bonds
- second propert or subsequent property
- units in CIS
- currency bought for gain
- chattels above 6000
allowable costs that can reduce gains
- fees and commissions for disposal
- advertising costs
- cost of purchase and costs associated with purchase
- enhancement expenditure e.g. extending property
IHT uk domiciled and non-uk domiciled
worldwide assets , uk assets
potentially exempt transfer (PET) (no trust)
- not taxed immediately but if person dies within 7 years of gift then chargeable
- if donor dies in 3 yrs then fully chargeable
- if 3-7 yrs then amount of gift added to estate declines at a declining rate
chargeable lifetime transfer (CLT) (discretionary trust)
- taxed at 20% immediately
- chargeable again if person dies within 7 yrs
exempt transfer for IHT
annual exemption : 3000 per fiscal year per individual
gifts in consideration of marriage : 5000 by a parent, exemption conditional on the marriage taking place
transfers to spouses or civil partners
transfers to political parties or charities
main residence nil-rate band (£175,000)
only covers transfers to ‘direct issue’ (wife, blood rleatives)
