Section 1 Mocks

UK resident tax on French home

As she’s a UK resident she will be taxed on her foreign property with CGT

Can use CGT allowance

Uncertified share

Uncertified = CREST

£1,000 minimum doesn’t apply

No stamp duty if transferred with no financial consideration

What is the SDRT on £5k investment trust shares, £2,500 OEIC, £600 private limited shares

OEIC = No stamp duty

Ltd shares = No stamp duty as below £1k

Inv Trust = £5k x 0.5% = £25

Deducting fees from income tax on savings interest and dividend income

Bank savings account

• Savings interest - Account fees can’t be deducted from his interest before taxable savings income is calculated

Equity OEIC

• Distributions which would be dividend income

• Fees also can’t be deducted from this for income tax purposes

Discretionary trust special allowance

Max of £500 of interest and dividends are not taxed

This is split evenly between all trustees each year

Tax order

Income tax always first

Then gains from investment bonds

The full tax order is:

• Non-savings (income)

• Savings (income)

• Dividends (income)

• Gains from investment bonds

Bond gains can be sliced based on number of years bond held

Pool car

When a car is pooled (number of employees can use it) is not a BIK

If it was an individual car used then it is a BIK

Gift Aid

Give £80 to charity HMRC give 20% as well

If you are a HRT it should be 40%

• HMRC add the 20% like before but the other 20% is used to reduce your income tax bill

So give £80, HMRC give £20 and your tax bill is reduced by £20 meaning you actually only spent £60

Savings income tax

First £5k of savings income isn’t taxed at all

However non savings income (like employment income) eats into that £5k

So if someone’s income is £13,570

• £12570 is tax-free = £1,000 taxable income

• That £1000 is taxed at 20% but it also reduces your £5k savings income

Company car tax

Rate of emissions per kilometre makes a % that is applied to price of car = annual taxable amount

• Same process for fuel

Personal contributions up to £5k can be taken off list price

REIT, AIM, EIS & VCT CGT charge

VCT - None

EIS - None after 3 years

REIT - Yes

AIM - If not under EIS then yes

Profit of £9k for self employed person. How much class 2 NIC do they pay

Nothing as it’s not mandatory

Could choose to pay class 2 but would only be needed if profits were less than the small profits threshold (£7105)

He will receive NIC credits for the year based on his profit level

He will also not be due class 4 as his profits don’t exceed profits threshold of £12,570

Criteria to qualify for business asset disposal relief

• Owned shares for 2 years prior to disposal

• Held at least 5% of issuer share capital

Discretionary Trust Mechanics

Trustees have already paid tax on income at trust rate (45%)

When Income is distributed it comes with a 45% tax credit (as 45% tax already paid)

Then calculate your own marginal rate

• If your own rate is lower than 45% can reclaim the excess

An ART paying £500 to charity will have to pay how much

£400

Gift aid declaration allows you to claim relief at Basic rate (20%)

£500 - 20% =£400.00

Stamp duty liable on what

Shares

• This includes REIT as these are listed shares

No SD on OEICS or EYFs as they are funds

Benefit in Kind

A Non cash benefit your employer gives you because of your job which HMRC treats as part of remuneration so tax it

Group Income Protection & group life assurance isn’t a BIK