Topic 3

Question 1

What is residence

Answer 1

Anyone that spends at least 183 days in a given tax year in the uk

Question 2

When does the tax year start and finish

Answer 2

Tax year runs from 6th of April to 5th of April

Question 3

What is domicile

Answer 3

The country considered to be an individual’s home by the tax Jules home by the tax authorities this is usually this is usually given at birth and is the same as a father’s dumb as a father’s domicile or mother’s if parents are not married

Question 4

What is deemed domicile

Answer 4

Someone who is not uk domiciled but has been but has been a uk tax resident for 15 of the previous 20 years

Question 5

What is domicile of choice

Answer 5

Someone can change from UK domicile by moving abroad and permanently severing all ties with the uk this is a this is lengthy and can be challenged

Question 6

What does residence tax normally refer to

Answer 6

Residents tax normally refers to income tax and capital gains tax

Question 7

What tax is normally affected by domicile status

Answer 7

Domino’s status mainly affects inheritance tax

Question 8

Who has a personal allowance

Answer 8

All UK residents including children have a personal allowance from birth

Question 9

When does someone’s personal allowance begin to be reduced and by how much

Answer 9

An individual’s personal allowance is reduced by one pound for every 2 pound of income above 100000 pound

Question 10

What is personal savings allowance and who is the legible for it

Answer 10

Personal savings allowance enables savers to receive a certain amount of savings interest tax free additional rate taxpayers get 0 personal savings allowance

Question 11

What is the definition of allowable expenses for self employed

Answer 11

Allowable expenses can only be incurred wholly and exclusively for the purpose of trade

Question 12

What is the definition for allowable expenses for employed persons

Answer 12

Allowoable expenses must be incurred wholly exclusively and necessarily while doing their job

Question 13

What is the order in which income tax is applied

Answer 13

1. non savings income
   2 savings income
2. dividends
3. chargeable gains on non qualifying life assurance policies

Question 14

Who do self employed persons pay income tax to

Answer 14

Self employed persons pay income tax directly to hmrc

Question 15

How often and when do self employed persons pay their income tax

Answer 15

Self employed income tax is due in 2 equal parts the 1st payment is due on the 31st of January the 2nd payment is due on the 31st of July any under or overpayment is then rectified the following 31st of January

Question 16

What class of national insurance contributions to self employed persons make

Answer 16

Self employed people pay class 4 and class 2 national insurance

Question 17

How is interest from savings paid to people

Answer 17

Interest is paid gross to all customers and is the individual’s responsibility to ensure the correct tax is paid

Question 18

What is gift aid

Answer 18

Donations made to charity using gift aid allows charities to recover basic rate tax at 20% on donations

Question 19

What is the advantage of people using gift aid

Answer 19

The person making the donation has their basic and higher rate tax thresholds extended by gross value of donation

Question 20

How many classes of national insurance contributions are there

Answer 20

Four

Question 21

Describe the full classes of national resurance contributions

Answer 21

Class 1. Paid by employees and employers
Class 2. Flat rate contributions paid by self employed if they’re annual profits exceed the small profits threshold
Class 3. Voluntary contributions
Class 4. Additional contributions for self employed on annual profits between min/max levels. Paid in half yearly installments