Topic 5

Question 0

Resident means

Answer 0

In uk for 183 days or more in any tax year

Question 1

Hierarchy of fin needs

Answer 1

Living today- curr arangments allow lifestyle
Protection- L&C
Income- Asu
Pension
Savings- future needs
Investment- future needs

Question 2

Oridinary resident means

Answer 2

Regular pattern of living in uk

Can be lower than 183 days, but clear its their oridinary pattern to live here

Question 3

Those wh are resident and oridinary res pay taxes on…

Answer 3

All income received anywhere

Question 4

Res but not ord res pay taxes on…

Answer 4

Uk income, uk income brought into uk

Question 5

Std personal allowance is

Answer 5

8105

Question 6

Age allowance is..

Answer 6

65-74 £10500
75 and over £10660
If gross income over £25400 allow reduces £1 for every £2 over until back to std allowance

Question 7

If income over £100,000 you lose pers allowance at…

Answer 7

Rate of £1 for every £2 over 100k until no allowance

Question 8

Earned income ABOVE the allowance is them subject to the following:

Answer 8

First £34370 20% basic
Next £115630 40% higher
Income above 150k 50% additional

Question 9

Dividends incme is paid with a

Answer 9

10% tax credit which account for basic rate tax, higher rate tax payer but pay more

Question 10

Starting rate for savings incme..

Answer 10

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

Question 11

CGT applies to…

Answer 11

The disposal of relevant assets

Disposal defined as sale, gifting, or assignment for moneys worth

Question 12

Certain assets are exempt from CGT…

Answer 12

Main res, gilts and corp bonds, vehicle, chattels under 6k, certain invtms

Question 13

Res but not ord res with pay cgt on…

Answer 13

Disposal of uk assets, only foreign assets if remitted to uk

Res and ord res pay on all assets

Question 14

CGT - losses can be…

Answer 14

Offset against gains, or if not gains made carried to a future tax year

Question 15

Annual exemption for cgt is

Answer 15

10600

Question 16

To calc cgt taxible gain?

Answer 16

Deduct acquitision costs from disposal price
Deduct any losses from other investments
Deduct the exemption- can use joint if assets owned jointly
=taxible gain

Question 17

CGT- how is taxable gain taxed?

Answer 17

Add to taxable income (that above pers allownce)
18% for what fits into basic band
28% for that which fall nt higher

Question 18

Domicile is…

Answer 18

The place considered to be your home, where you will return at some point

Question 19

Deemed domile occurs when…

Answer 19

Someone domiciles outside uk spends 17 out 20 years as a uk res

Question 20

Someone domiciled or deemed domiciled will be subject to IHT on…

Answer 20

All worldwide possessions

Question 21

Someone res but not domiciled or deemed dom subject to IHT on…

Answer 21

Only on possesions in uk

Question 22

IHT rate is

Answer 22

40%

Question 23

IHT Allowances and exceptions…

Answer 23

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

Question 24

IHT, annual gift exemption is…
Small gift?
Wedding?

Answer 24

£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

Question 25

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?

Answer 25

Sliding scale known as taper relief

Question 26

Chargeable lifetime transfer is

Answer 26

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

Question 27

Stamp duty reserve tax is

Answer 27

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