Tax Compliance (UK) Flashcards

Writing down allowances (WDA) on the main pool of plant and machinery for UK corporation tax are calculated at:

Answer: 18% per annum

The main pool writing down allowance is 18% per annum on a reducing balance basis. The special rate pool (long-life assets, integral features) attracts a 6% WDA.

Under the UK loan relationship rules, which of the following is taxable as income?

Answer: Interest income received by a company

Under the loan relationship rules (CTA 2009), interest income received by a company is taxable as income. Dividends from UK subsidiaries are generally exempt from corporation tax.

In the UK, the tax point for VAT on a standard-rated sale of goods is determined by the earlier of:

Answer: Date of delivery and invoice date

The basic tax point for goods is the date of delivery or making available (actual tax point). The tax point can be advanced to the invoice date if invoiced within 14 days of delivery.

An individual's income tax liability is calculated by applying tax rates to:

Answer: Taxable income (after deducting reliefs and allowances)

Income tax is charged on taxable income, calculated after deducting the personal allowance, gift aid donations (grossed up), pension contributions, and other allowable deductions from net income.

Which of the following is exempt from UK inheritance tax?

Answer: Transfers between UK-domiciled spouses

Transfers between spouses (and civil partners) who are both UK-domiciled are fully exempt from inheritance tax. Gifts to adult children and unmarried partners use up the nil-rate band or are potentially exempt transfers.

For the purposes of UK capital allowances, which assets qualify for the 'special rate pool' WDA of 6%?

Answer: Long-life assets and integral features of buildings

The special rate pool (6% WDA) applies to long-life assets (over 25-year useful life), integral features of buildings (heating, air conditioning, electrical systems), and thermal insulation of buildings.