Topic 5 Flashcards
Resident means
In uk for 183 days or more in any tax year
Hierarchy of fin needs
Living today- curr arangments allow lifestyle Protection- L&C Income- Asu Pension Savings- future needs Investment- future needs
Oridinary resident means
Regular pattern of living in uk
Can be lower than 183 days, but clear its their oridinary pattern to live here
Those wh are resident and oridinary res pay taxes on…
All income received anywhere
Res but not ord res pay taxes on…
Uk income, uk income brought into uk
Std personal allowance is
8105
Age allowance is..
65-74 £10500
75 and over £10660
If gross income over £25400 allow reduces £1 for every £2 over until back to std allowance
If income over £100,000 you lose pers allowance at…
Rate of £1 for every £2 over 100k until no allowance
Earned income ABOVE the allowance is them subject to the following:
First £34370 20% basic
Next £115630 40% higher
Income above 150k 50% additional
Dividends incme is paid with a
10% tax credit which account for basic rate tax, higher rate tax payer but pay more
Starting rate for savings incme..
Is 10% up to £2710 above allowances, any income above the £2710 is taxed at normal rate
Eg gross up savings by div 0.8
Deduct what is left of the the sal over the allowance from £2710
Charge whats left at 10%
And the remaining savings at the relevant rate
CGT applies to…
The disposal of relevant assets
Disposal defined as sale, gifting, or assignment for moneys worth
Certain assets are exempt from CGT…
Main res, gilts and corp bonds, vehicle, chattels under 6k, certain invtms
Res but not ord res with pay cgt on…
Disposal of uk assets, only foreign assets if remitted to uk
Res and ord res pay on all assets
CGT - losses can be…
Offset against gains, or if not gains made carried to a future tax year
Annual exemption for cgt is
10600
To calc cgt taxible gain?
Deduct acquitision costs from disposal price
Deduct any losses from other investments
Deduct the exemption- can use joint if assets owned jointly
=taxible gain
CGT- how is taxable gain taxed?
Add to taxable income (that above pers allownce)
18% for what fits into basic band
28% for that which fall nt higher
Domicile is…
The place considered to be your home, where you will return at some point
Deemed domile occurs when…
Someone domiciles outside uk spends 17 out 20 years as a uk res
Someone domiciled or deemed domiciled will be subject to IHT on…
All worldwide possessions
Someone res but not domiciled or deemed dom subject to IHT on…
Only on possesions in uk
IHT rate is
40%
IHT Allowances and exceptions…
Tfrs between marrried Nil rate band to £325000 If you die without using nil rate band, unused % goes to married spouse Gifts to charity or political parties Service personnel KIA
IHT, annual gift exemption is…
Small gift?
Wedding?
£3k pa
Can be carried over 1 yr- £6k
Small gifts £250 or less, as many diff people as you want
£5k parent, £2.5k gp, £1k anyone else
Gifts not covered in the exemptions will use up nil rate band if made within 7 years of death- potential exempt trfs
If this is the case, what due you apply to calc the IHT due?
Sliding scale known as taper relief
Chargeable lifetime transfer is
Charged at 20%, like a dep against iht bill incase donor dies
Eg gifts int most types of trusts
If donor survives charge is non refundable
If dies it is deducted from iht bill
Stamp duty reserve tax is
1.5% of market value for bearer instruments (like bonds but where name of owner not recorded) possession of cert is only proof of ownership
0.5% for shares
£5 or less exempt
