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Overseas income assessed under the remittance basis will be subject to income tax at ... rates. Lernen beginnen
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1. Non-saving income. | 2. Saving income. | 3. dividend income. | To maximise tax relief in most cases offset PA and reliefs against income in the same order as above. | In some circumstances it is beneficial to offset the PA in different order.
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I.T. Interest on qualifying loans relief is based on ... amount. Lernen beginnen
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Maximum deduction from total income is greater of £50.000 and 25% or ATI. The ATI formula is: ATI - adjusted taxable income Lernen beginnen
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Total income − Gross PPCs PPC - personal pension scheme
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Marriage allowance (£1250) restriction: Lernen beginnen
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Neither of spouses cannot be a higher or additional taxpayer.
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DTR formula (income tax reducer): Lernen beginnen
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lower of UK and overseas tax
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ET PPT Lernen beginnen
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Employment | Trading | Property | Pension | Trust
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The income arising from assets held jointly by husband and wife is normally split 50:50, except... Lernen beginnen
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shares in close companies.
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The income arising from assets held jointly by husband and wife is normally* ... An ... is available, except... and shares in close companies. 3 Lernen beginnen
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split 50:50. | An election is available to split the income according to beneficial ownership. | The election cannot be made for joint bank accounts or building society accounts.
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Income earned by a child from a parental disposition is taxed on the parent if exceeds... Lernen beginnen
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if the gross income exceeds £100 per annum. Note that, when the amount is greater than £100, the whole amount is taxable, not just the excess.
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Income tax exempts. Interest on... 3 Lernen beginnen
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NSI saving certificates. | Save as you earn (SAYE) share save accounts. | Tax repayments interest. NST NSI - National Savings and Investment
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# Lernen beginnen
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Statutory redundancy and £30.000 of loss of employment compensation. | Universal credit. | Child benefit. | Venture capital trust (VCT) dividends. | Educational grants and scholarship. | Interest* | Winnings and prizes. SUCh_VIEW *NSI saving certificates. | Save as you earn (SAYE) share save accounts. | Tax repayments interest.
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I.T. ISA allowance on spouse death conditions: Lernen beginnen
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Any combination of ISA-cash and ISA-shares up to £20,000.
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Property income is assessed on cash basis but accrual basis is compulsory if... 2 Lernen beginnen
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if gross annual rent is over £150,000 | or can elect to use accrual basis.
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Property income. Expenses reliefs: 2 Lernen beginnen
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Replacement furniture relief. | Interest paid is an allowable deduction*. *special rules for individuals apply
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Property income losses treatment for individuals: Lernen beginnen
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can only be carried forward against future UK property income. | The loss is automatically carried forward and set against the first available future property income. If a loss arises on the overseas property business it may only be carried forward against future profits from the overseas property business. | Profits and losses on all the properties are aggregated.|
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Rent received + Rental income portion of short lease premiums received − Allowable expenses
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Tax relief on financing costs of investment property is restricted to... Lernen beginnen
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Tax relief on financing costs of investment property applies to loans to... 2 Lernen beginnen
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to buy | or improve residential property. Carrying out work to the property in order to make it more marketable, or taking steps to find purchasers, will indicate a trading motive. | Relief has been phased in gradually
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Investment property financing costs relief for 2020/21 rules for individuals: 2cz Lernen beginnen
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No finance costs deductible from property income. | Tax relief for all finance costs given at 20% by deduction from IT liability.
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Investment property financing costs relief has not impose restrictions on: 3 Lernen beginnen
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Companies. | Loans relating to the furnished holiday accommodation. | Loans relating to non-residential properties.
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Property income. Premium for granting short leases formula: Lernen beginnen
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n = number of years of lease
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Rent-a-room relief conditions: 2cz+2cz Furnished room in a main domestic residence. Lernen beginnen
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Gross rent up to £7,500 is exempt, | unless elect for loss. If the gross annual receipts are more than £7,500: – the individual may choose between paying tax on the excess | or being taxed in the ordinary way on the profit from letting (rent less expenses less replacement furniture relief).
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Furnished holiday accommodation (FHA) tax treatment: 2 Lernen beginnen
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property income but treated as arising from a single and separate business. | Business asset for Gift relief and BADR (as opposed to normal residential property). Relevant earnings for pensions relief.
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Furnished holiday accommodation (FHA) and finance costs: Lernen beginnen
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100% fully deductible from FHA income
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Furnished holiday accommodation - all Plant and machinery (including furniture) treatment: 2 Lernen beginnen
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Deduction available, if using cash basis. | Capital allowances available, if using accruals basis.
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3 Lernen beginnen
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Can only be set against profits from the same FHA business. | Firstly offset in the same year, then carry forward. | UK FHA losses can on be set against UK FHA profits (the same rule for EEA losses).
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Furnished holiday accommodation conditions: 4 Lernen beginnen
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Available to let for at least 210 days. | Actually let for at least 105 days. | If own more than 1 property averaging is available to satisfy the 105 day rule. | Not let for periods of ‘long term occupation’* in excess of 155 days. *occupation by the same person for at least 31 consecutive days.
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Situation condition for Furnished holiday accommodation: Lernen beginnen
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Must be situated in the UK or EEA.
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Real estate investment trusts (REITs) definition and operating: 4 REIT gives investors the opportunity to invest in a quoted property business set up as an investment trust. | Dividends received by an individual out of the profits of a REIT are not treated like other dividend income Lernen beginnen
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Quoted property investment trust (QPIT). | Dividend received by individual from REIT are treated as property income.| Received amount grossed up by 20% on IT return | but the tax credit will be given of this gross amount. QP20% Individual who receives dividends of £1,200 will include gross property income in his tax return of £1,500. The income will be taxed at 20%, 40% or 45%. Tax credit of £300 is available to reduce the actual tax payable, and can be repaid.
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Company transfers quoted shares to its director, who pays £1 per share, whereas MV is £24.50. What is the amount of tax if director is additional rate taxpayer? Lernen beginnen
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It is a taxable benefit equal to the amount underpaid, so it will 45% of IT and 2% of NIC ee* for £23.50 of each share. *Share are quoted so fall within the definition of ‘readily convertible assets’, therefore NIC class 1 is payable.
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