TC

Question 1

Property allowance

Answer 1

If property income is £1,000 or less, it is exempt from income tax
Any greater and usual sum (income less expenses) is taxed

Question 2

Rent a room relief

Answer 2

Accommodation let to tenant is part of taxpayer’s only or main residence
Up to £7,500 in rent is exempt from income tax each year

Question 3

Personal pension contribution vs occupational pension contribution

Answer 3

Personal –> gross up contribution (if net) by multiplying by 100/80. Extend tax bands by that amount
Occupational –> give deduction from gross amount of pension contribution

Question 4

Mileage rate scheme

Answer 4

Car or van = 45p per mile for first 10k miles, 25p per mile after

Question 5

Trading allowance

Answer 5

Trading profits up to £1000 are not taxable

Can elect to deduct £1000 if expenses >£1,000

Question 6

Basis rules - tax year 1

Answer 6

Date of commencement of trade to following 5th April

Question 7

Basis rules - tax year 2

Answer 7

No AP ending in tax year 2 –> tax profits arising in tax year
AP ends in tax year 2 –> CYB (AP = 12 months); first 12 months trading (AP < 12 months); tax last 12 months of AP (AP > 12 months)

Question 8

Single asset pools (CAs)

Answer 8

Each asset with partial private use kept in separate pools

Only business element receives CAs

Question 9

CAs in year of cessation

Answer 9

Disposal proceeds of assets deducted from each pool, resulting in balancing allowances or balancing charges
Disposal value > TWDV = balancing charge
Disposal value < TWDV = balancing allowance

Question 10

CGT - annual exempt amount

Answer 10

£12,300

Question 11

CGT - Business Asset Disposal Relief

Answer 11

Qualifying disposals of business assets
Gains taxed at 10%
Taxed before other assets (ie. uses up BRB)

Question 12

CGT - disposals between spouses

Answer 12

No gain/no loss

If sold outside marriage afterwards, cost is original cost to first spouse who gave it to their husband/wife

Question 13

CGT - gifts of quoted shares value

Answer 13

Lower quoted price + 1/2 (higher quoted price - lower quoted price)

Question 14

CGT - rollover relief

Answer 14

Proceeds of sale of QB assets used to purchase replacement QB assets
Must be acquired one year before or up to three years after sale
Gain = lower of: amount not reinvested and original gain

Question 15

CGT - gift relief

Answer 15

Amount below MV that was paid for asset/shares

Gain restricted for shares –> (chargeable business assets/chargeable assets) x gain

Question 16

CGT - investors relief

Answer 16

Charges CGT on qualifying disposals at 10%

Qualifying disposals = disposals of unquoted shares in company and held continually for 3+ years

Question 17

CGT - private residence relief

Answer 17

(Actual deemed occupation (months)/ownership (months)) x net gain

Question 18

CGT - letting relief

Answer 18

Let of part of property while still living there

Lower of: letting gain; PRR; £40,000

Question 19

Remittance basis charges

Answer 19

£30k - resident in at least 7 of last 9 tax years
£60k - resident in at least 12 of last 14 tax years
Add after computing tax

Question 20

Double Tax Relief (DTR)

Answer 20

Lower of: overseas tax suffered and UK tax on overseas income/gain

Question 21

NICs - Apprenticeship levy

Answer 21

0.5% of annual pay bill

First £15,000 is tax free per year

Question 22

IHT - marriage gift exemption

Answer 22

£5,000 parent
£2,500 remote ancestor or one of parties getting married
£1,000 in any other case

Question 23

IHT - Residence nil rate band

Answer 23

Death estate includes home and is left to direct descendants

Value of £175,000 –> reduced by £1 for every £2 over £2 million

Question 24

IHT - valuation of quoted shares

Answer 24

Lower of: quarter up rule –> lower quoted price + 1/4 (higher quoted price - lower quoted price)
Average of highest and lowest marked bargains on day of transfer

Question 25

IHT - valuation of related property

Answer 25

Value of whole property x (Value of property transferred at unrelated value/value of property transferred at unrelated value + value of related property at unrelated value)

Question 26

IHT - Quick Succession Relief

Answer 26

Tax paid on earlier transfer x (net transfer/gross transfer) x relevant %
Relevant % = 100% less than one year, reduces by 20% each year

Question 27

IHT - Business Property Relief

Answer 27

50% relief –> quoted shares where donor had control; assets owned by donor and used in business they control
100% relief –> sole trader/partnership business transferred; shares in unquoted company

Question 28

IHT - Taper relief

Answer 28

3-4 years after death = 80% death IHT chargeable

Reduces by 20% for each year until 7 years

Question 29

CG for companies - Indexation allowance

Answer 29

Cost x (RPI in month of disposal - RPI in month of expenditure/ RPI in month of expenditure)

Question 30

R&D for SMEs

Answer 30

Less than 500 employees and turnover less than 100m euros or total assets less than 86m euros
Usual 100% deduction for expenditure + 130% deduction
i.e. expenditure x 2.3 is deducted

Question 31

R&D for large companies

Answer 31

RDEC credit of 13%
Add to total taxable profit
Deduct from CT LIABILITY!

Question 32

Group relief

Answer 32

Lower of: maximum surrender by company A and maximum claim by company B

Question 33

VAT - partial exemption test one

Answer 33

Total input VAT less than £625pm on average AND exempt supplies no more than 50% of total supplies
May recover input VAT on exempt supplies

Question 34

VAT - partial exemption test two

Answer 34

Total input VAT - input tax directly on taxable supplies is less than £625 pm
AND Exempt supplies are no more than 50% of total supplies

Question 35

VAT - capital goods scheme

Answer 35

Partially exempt supplies made - taxable % x input tax paid is recoverable
Changes in taxable % –> (Total input VAT/10 or 5 years) x (taxable % now - original taxable %)

Question 36

Stamp Duty - paper based shares

Answer 36

0. 5% of consideration paid, rounded up to nearest £5

e. g. £3433 x 0.005 = £17.17 –> round up to £20

Question 37

Stamp Duty Reserve Tax

Answer 37

Paperless agreements

0.5% of consideration (no rounding)

Question 38

Stamp Duty Land Tax - first time buyer

Answer 38

0% on first £300,000
5% on any excess up to £500,000
Normal rates if value exceeds £500,000