Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CAAV Revision > Taxation > Flashcards

Taxation Flashcards

1
Q

What is the tax payable by on the earnings of a self employed individual?

A

Income Tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is income tax payable on? (self employed)

A

Net value of trading income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What changes have recently been introduced regarding year ends for seld employed individuals.

A

All year ends for taxation purposes will now be the 31st March annually.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

When do self employed indiviuals pay income tax?

A

31st Jan and 31st July annually

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is HMRC’s prefered method of valuation for the purposes of stocktaking valuations?

A

Actual cost of production.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

If it is unfeasable to conduct an acytual cost of produciton valuation during a stocktaking valuation what approach is taken and how is this calculated.

A

Deemed cost of production. Crops - 75% of MV, Sheep & Pigs - 75% of MV, Cattle - 60% of MV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the current income allowance and thresholds?

A

Personal threshold £12570. £12570 to £50270 20%. £50270 to £125140 40%. Over £125140 45%.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Who must contribute to National Insurance Payments

A

Empoyees and Self Employed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are the current pension rates for the various parties.

A

Employer 3% and Employee 5%.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Who pays corporation tax and on what is it paid?

A

Payable by any limited company. 25% of any profits including CGT.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is AIA and what does it allow?

A

Annual Investment Allowance. Allows the offsetting of expenditure on fixed plant and machinery against coporation tax to a value of £1m.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

How does taxation in a partnership generally work?

A

Each partner would be responsible to submit self assessment taxation records to HMRC.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Who pays CGT?

A

Individuals, partners and companies.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

When is CGT payable?

A

Upon the diposal or deemed disposal (e.g gift) of an asset.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

How is the gain calculated.

A

Realised value less base value.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What elements are included against an assets base value?

A

Cost of aqusition (either price paid or value on 31st March 1982), costs assosiated with the improvement of the asset, costs involved with the defending a property title and costs involved in the dosposal of an asset (agents fees & solicitors fees).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the current rates of CGT?

A

20% base rate. 24% rate on disposal of residential property.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What reliefs are available to reduce potential CGT?

A

Personal allowance, Principle Private Residence, Rollover Relief, Business Asset Disposal Relief and Holdover Relief.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is the personal CGT allowance?

A

£6000 for individuals and £3000 for trusts.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is Principle Private Residence relief?

A

Relief available on gains associated with an individulas main residence in addition to generally 0.5ha of grounds and any buidlings associated with the occupation of that property (garages).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is rollover relief?

A

Deferes CGT payable if proceeds of a sale are used to fund purchases of qualifying assets.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What are the time periods invlolved with rollover relief?

A

Must be bought no earlier than 1 year before disposal and no later then three years after disposal.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What are the qualifying assets available under rollover relief?

A

Land and buildings occupied for trade, fixed plant and machinery, goodwill and Ships, aircraft, hovercraft or spacecraft.

24
Q

What restrictions apply to rollover relief in relation to CPO?

A

Rollover relief is available when land is CPO’ed however, the funds must be used to purchase land or buildings.

25
Q

What is Business Asset Disposal Relief?

A

Relief reducing the rate of CGT to 10% for gains upton £1million.

26
Q

When is Business Asset Disposal Relief Available?

A

On the disposal of part of or the whole of a business and it’s assets.

27
Q

What is Business Asset Disposal Relief available on?

A

Relevant business assets i.e only assets used in connection with a trading business so not available on let property.

28
Q

What is the minimum period of ownership to qualify for Business Asset Disposal Relief?

A

2 years.

29
Q

What is holdover relief and when is it available?

A

Defers the payment of CGT when property is gifted.

30
Q

When is inheritance tax payable?

A

Upon the death of an individual.

31
Q

When is inheritance tax calculated?

A

Based upon a valuation of the deceased estate assuming transfer immediately before death.

32
Q

What is the current rate of IHT?

A

40%

33
Q

What is the nil rate band for the purposes of IHT?

A

£325000

34
Q

What reliefs are available to minimise IHT obligations?

A

PET’s, APR & BPR

35
Q

What are PET’s?

A

Potentially exempt transfers. Tapered relief to provide IHT relief on property tranfered out of a deceased ownership. 7 years before death = 100% relief.

36
Q

What is APR?

A

Agricultural Property Relief.

37
Q

What value is APR based upon? State relevant caselaw.

A

APR is available on the agricultural value of qualifitying land and buildings. This assumes a perpetual covenant being place on the assets limiting their use to that of agriculture. The Antrobus case sets a precidence of the Ag value being 70% of MV.

38
Q

What are the ownership requirements to benefit from APR?

A

Property must be owned for a minimum of 2 years when farmed in hand or in a partnership. Land must be owned for at least 7 years when farmed by another under a tenancy.

39
Q

What property is APR available on?

A

growing crops, stud farms for breeding and rearing horses and grazing, trees that are planted and harvested at least every 10 years (short-rotation coppice), land not currently being farmed under theHabitat Scheme, land not currently being farmed under a crop rotation scheme, farm buildings, farm cottages and farmhouses

40
Q

What rates of APR are available and when are these rates applied?

A

100% on land farmed in hand, let under short term grazing licences or let on or after the 1st September 1995. 50% available in all other cases i.e AHA lettings.

41
Q

What is BPR?

A

Business Property Relief.

42
Q

When is BPR available?

A

Available on the land, stock and machinery owned and used by a trading business?

43
Q

What rates of BPR are available?

A

100% on a business or interest in a business and on shares in a listed company. 50% of land buildings or machinery owned by deceased but used by a business in which they were a partner.

44
Q

What criteria must be met to qualify for BPR? State relevant case law.

A

The business must not consist wholly or mainly of investments. Balfour Case and Farmer vs HMRC.

45
Q

What is VAT and when is it payable?

A

Value added tax. It is payable by the final consumer of a good or a service.

46
Q

What are the rates of VAT payable?

A

20% standard rate, 5% domestic energy rate, 0% on food and some items e.g childrens clothing.

47
Q

When must a business be VAT registered?

A

When their turnover exceeds £90,000.

48
Q

When is SDLT payable?

A

Upon the purchase of or leasing of a property transaction?

49
Q

What are the rates of SDLT?

A

Residential Property: £0 to £250,000 - 0%, next £675,000 - 5%, next £575,000 - 10%, over £1.5million - 12%
Non Resi Property: Upto £150,000 - 0%, next £100,000 - 2%, over £250,000 - 5%.

50
Q

What reliefs are available for SDLT?

A

First time buyer relief, nil rate band upto £425,000.

51
Q

How are additional property purcahses treated?

A

Any second resi property exceeding £40,000 in value includes an additional 3% ontop of normal charges.

52
Q

How is SDLT calculated on leases?

A

Leases over 7 years must pay SDLT. Based on 3.5% of NPV of agreed rent over agreed term & 1% over £150,000

53
Q

What is the date of valuation for coucil tax bandi?

A

1st April 1991.

54
Q

How are business rates calculated?

A

Based on rateable value of the property which is assessed by HMRC using a hypothetical FRI lease arrangement.

55
Q

What reliefs are available for business rates?

A

A host of relief s availabel including small business rate relief & rural shop, post office and pub relief.

CAAV Revision (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions