Tax

Question 1

Who are the chargeable persons/entities for income tax?

Answer 1

Employees, sole traders, partners, shareholders, lenders, and debenture holders

Question 2

What is the basic income tax rate for taxable income up to £37,700?

Answer 2

20%

Question 3

What is the higher income tax rate for taxable income from £37,701 to £125,140?

Answer 3

40%

Question 4

What is the additional income tax rate for taxable income above £125,140?

Answer 4

45%

Question 5

What is the starting income tax rate for taxable income up to £5,000?

Answer 5

0%

Question 6

What is the basic income tax rate for dividends for taxable income up to £37,700?

Answer 6

8.75%

Question 7

What is the higher income tax rate for dividends for taxable income from £37,701 to £125,140?

Answer 7

33.75%

Question 8

What is the additional income tax rate for dividends for taxable income above £125,140?

Answer 8

39.35%

Question 9

What is the income tax year period?

Answer 9

6 April - 5 April

Question 10

By when must an online tax return be completed?

Answer 10

By 31 January

Question 11

When is the final balancing payment for income tax due?

Answer 11

31 January following year

Question 12

What is the standard personal allowance (PA)?

Answer 12

£12,570

Question 13

How does the personal allowance reduce when income exceeds £100,000?

Answer 13

Reduces by £1 for every £2 over £100,000

Question 14

What is the marriage allowance?

Answer 14

Transfer of unused £1,260 to spouse

Question 15

What is the blind person’s allowance?

Answer 15

Additional £2,520

Question 16

What is the property income allowance?

Answer 16

£1,000

Question 17

What is the gross trading income allowance for sole traders?

Answer 17

£1,000

Question 18

What are the personal savings allowances?

Answer 18

• £1,000 (income < £37,700)
• £500 (income £37,701 - £150,000)
• £0 (income > £150,000)

Question 19

What is the dividend income allowance?

Answer 19

£2,000

Question 20

What does the opening year rule state?

Answer 20

Assessed on profits from day 1 of trading

Question 21

What does the current year basis state?

Answer 21

Assessed on taxable profits of accounting year

Question 22

What is the closing year rule?

Answer 22

Assessed from end of last accounting period to date business stops trading

Question 23

What is the general anti-avoidance rule (GAAR)?

Answer 23

To combat abusive tax avoidance arrangements

Question 24

Who are the chargeable persons/entities for capital gains tax?

Answer 24

Individuals, sole traders, partners, and shareholders

Question 25

What is the chargeable gain in capital gains tax?

Answer 25

Disposal value minus acquisition cost and allowable expenditure

Question 26

What is the annual exemption amount for capital gains tax?

Answer 26

£3,000

Question 27

What is the business asset disposal relief rate?

Answer 27

10%

Question 28

What is the lifetime limit for business asset disposal relief?

Answer 28

£1,000,000

Question 29

What is the roll-over relief?

Answer 29

On qualifying business assets where proceeds are used to buy another QBA

Question 30

What is the chargeable gain tax rate for residential property?

Answer 30

24%

Question 31

What is the corporation tax year?

Answer 31

1 April - 31 March

Question 32

What is the standard corporation tax rate?

Answer 32

25%

Question 33

When must HMRC be notified for self-assessment?

Answer 33

Within 3 months of first accounting period

Question 34

What is the value added tax (VAT) threshold for registration?

Answer 34

£85,000

Question 35

What is the standard rate for VAT?

Answer 35

20%

Question 36

What is the zero rate for VAT?

Answer 36

0% for new build residential property

Question 37

What is the inheritance tax (IHT) nil rate band?

Answer 37

0% up to £325,000

Question 38

What is the gift exemption limit for inheritance tax?

Answer 38

£250 unlimited number

Question 39

What is the taper relief for inheritance tax?

Answer 39

Reduced rate for gifts made 3-7 years before death

Question 40

What is the charge for stamp duty land tax (SDLT) on a property costing less than £250,000?

Answer 40

0%

Question 41

What is the SDLT rate for properties costing between £250,001 to £925,000?

Answer 41

5%

Question 42

What is the commercial SDLT rate for properties above £250,001?

Answer 42

5%

Question 43

What are the residential rates for land transaction tax in Wales for properties costing less than £225,000?

Answer 43

0%

Question 44

What is the commercial land transaction tax rate for properties above £1 million?

Answer 44

6%

Question 45

What is the capital gains tax annual exemption?

Answer 45

£3,000

Question 46

What is the private residence relief for capital gains tax?

Answer 46

Exempt if main residence throughout ownership

Question 47

What is the income tax responsibility of personal representatives (PRs) on investment income into an estate over £100 per year?

Answer 47

PR pays tax on investment income

Question 48

What percentage is payable for a 3-4 year estate?

Answer 48

80%

Question 49

What percentage is payable for an estate lasting less than 3 years?

Answer 49

60%

Question 50

What does the death estate for tax purposes include?

Answer 50

Donation mortis causa, interest in joint tenancy, life/limited interest in settled property

Question 51

Who is responsible for paying Capital Gains Tax (CGT) during the administration of an estate?

Answer 51

Personal Representatives (PRs)

Question 52

What happens to CGT owed by the estate?

Answer 52

It passes to PR and then on to beneficiaries CGT free, but will be payable on increase from market value at time of death when beneficiaries sell

Question 53

How much investment income triggers income tax payment by PR?

Answer 53

Over £100 per year

Question 54

Who pays income tax on income given to beneficiaries from estate assets?

Answer 54

Beneficiaries

Question 55

Fill in the blank: PR pays income tax on investment income into estate over _______.

Answer 55

£100 per year