Top-Up Flashcards
Ramsey principal
Ignore a series of transactions that are tax avoidance and determine the transactions tax liability by its end result
How long do you have to pay IHT for a lifetime transfer and death transfer?
Lifetime transfer - 6months from end of month of transfer
Death transfer - 6months from end of month of death
IR35
Helps HMRC get additional tax from those classes as employed in all but name
Trading allowance
If less than £1k trading income then do not need to declare income.
If over £1k, can either claim £1 or claim expenses
If let out part of resi. home what is the CGT exemption?
£40k per person. Then taxable on anything above this.
Chattel exemption amount
£6k per person. Then taxable on anything above this on the lower of:
The whole actual gain
Or
5/3rds of excess over £6k allowance
When is CGT due?
31st Jan
If there is excess input VAT to output VAT is that difference then refunded by HMRC or submitted to HMRC?
Refunded by HMRC (RI>O)
Are REIT’s subject to stamp duty on stock purchases?
Yes
Can losses from corporate bonds or GILT’s be carried forward into future tax yrs?
Corporate bonds only
Gilts - No
RNRB does not apply to what?
Does not apply to gifts made during lifetime so no PET or CLT’s
How long do you have to claim a second NRB?
2yrs from end of month of death occurring
Or
3 months of beginning to act as personal representatives
How to calculate IHT when a PET is made
- Deduct PET transfer 100% total from NRB (used gift exemption of £3k/£6k?)
- Deduct remaining NRB from death transfer amount
- Remaining death transfer amount x 40%
how to tell when a transfer or gift is a PET or CLT?
PET - Generally a gift
CLT - Generally DAMPS only
Who is liable to pay a PET?
The recipient
What amount is needed for a charity contribution to then classify for reduced IHT?
10% after NRB and reliefs (such as political party contrib.)
When are you deemed domicile?
When resident for 15yrs of last 20yrs
When non UK domicile what do you pay tax on?
Anything that goes through UK
Tax payable on arising and remittance basis
Arising - tax on foreign income as it arises
Remittance- tax payable when brought into UK
Key self assessment deadline dates
Tax returns issued by HMRC - 6th April
Deadline for submitting return on paper - October 5th
Deadline for submitting return online if want underpayment - December 30th
Deadline for submitting return online & first payment- Jan 31st
Second payment - July 31st
How many days must SDLT be paid within?
14days from completion date
Stock/scrip dividends
Company offers a choice of receive dividends or new shares
Innovative finance ISA
Peer to peer lending
Why are life assurance policies/bonds not subject to CGT? When is this paid?
Suffer from a CLT and so not categorised to suffer CGT so instead pay income tax on gains
Paid when chargeable event occurs (DAMPS)
Why are life assurance bonds often written in trust?
Saves admin. work as receive not income producing asset and returns within 5% classed as return of capital
Who is a vulnerable beneficiary for a trust?
Someone under 18
A disabled person - physically or mentally
How does GAAR ensure consistent application?
A designated officer follows a set of procedures that allows the taxpayer to explain why they should not be subject to GAAR. Then reviewed by GAAR panel.
What is the effective income tax rate between £100,000 and £125,140
60%
How long can a deed of variation be enacted upon after death on a will?
2yrs after death
Annual IHT exemption and small gift exemption
£3k and can use prev. yr so can be £6k
£250 small gift exemption per beneficiary
Can a mortgage reduce the IHT liability?
Yes
What tax exemption on savings do non tax payers get?
£6k as £5k starting rate exemption and £1k PSA
What can suffer from a market value reducer if redeem early?
Life assurance policies/bonds as stops dilution
What form do you claim non-UK resi. or domicile status on?
P85
Would you be best disposing of losses on assets before or after leave UK permanently?
Before so can carry losses forward for future years
How do landlords generally receive rent when non UK resi.?
Net of 20%, however can apply for rent to be paid gross
Do you have to be UK domicile to invest in an ISA?
No UK resi. only
General rules for IT, CGT, IHT if who have left the UK
IT- Liable on anything arising in the UK
CGT - Liable on gains from UK assets for 5yrs following departure
IHT - If remain UK domicile upon leaving then liable to UK IHT on worldwide assets for at least 5yrs
Thing to remember for IHT questions?
Have they used their annual exemption of £3k (£6k max.)
When creating a trust what can a settlor choose to do to CGT?
Elect to hold over CGT to trustees
Can you transfer VCT shares but keep income tax relief?
Yes
