Other
Cheatsheets Tax Law SQE1 - FLK1 + 2
- Course
- Institution
Cheatsheets Tax Law SQE1 - FLK1 + 2 - Income Tax - Capital Gains Tax - Corporation tax - Inheritance tax - VAT and SDLT
[Show more]
1 review
By: benveversaberdeen • 1 year ago
Seller
Follow
studentrechten1200
Reviews received
Content preview
TAX LAW SARA AHMEDINCOME TAX 2023-2024
STEP 1: IDENTIFY TOTAL INCOME
• Income = salary, pension, interest on savings, dividend, rental income, benefits in kind
• NOT income = gifts, capital receipt from one off sales
STEP 2: CALCULATE NET INCOME: TOTAL INCOME – PENSION – INTEREST OF QUALIFYING LOANS = NET INCOME
• Qualifying loans = loans in partnership, shares in a close company, employee-controlled company or co-
operative
STEP 3: GET TO TAXABLE INCOME: NET INCOME – PERSONAL ALLOWANCE (12.570) = TAXABLE INCOME
Ø Net income LESS than 100k? = NET INCOME – 12.570 = TAXABLE INCOME
Ø Net income MORE than 100k? = 12.570 – (NET INCOME – 100K): 2 = REDUCED ALLOWANCE (if negative
number, then no allowance, then net income will equal the taxable income).
*If Net income more than 125.140 = NO PERSONAL ALLOWANCE!
*If on exam it says taxable income, it means personal allowance is already deducted!
STEP 4: IDENTIFY THE NON-SAVINGS INCOME (NSI) AND CALCULATE THE TAX ON IT FIRST
TAXABLE INCOME – SAVINGS INCOME – DIVIDEND INCOME = NON-SAVINGS INCOME (Sometimes given on exam)
1) NON-SAVINGS INCOME:
• Basic: 0-37.500 = 20%
• Higher: 37.701-125.140 = 40%
• Additional: More than 125.140k = 45%
STEP 6: CALCULATE THE SAVINGS INCOME
*Personal savings allowance = 1000 for basic rate taxpayers and 500 for higher rate tax payers. Deduct from
savings allowance and ADD to the NSI.
2) SAVINGS INCOME:
• Basic: 20% (first 1000 taxed at 0%)
• Higher: 40% (first 500 taxed at 0%)
• Additional 45% (no personal savings allowance)
STEP 7: CALCULATE THE DIVIDEND INCOME
*Dividend tax free allowance is 1000. Deduct this from dividend income and ADD to the Jug (NSI + SI)
3) DIVIDEND INCOME:
• Basic: 8,75%
• Higher: 33.75%
• Additional: 39,35%
SUGGESTION TO PAY LESS TAX:
- TRANSFER TO SPOUSE IF THEY HAVE PERSONAL ALLOWANCE LEFT AND PAY BASIC RATE
- INCREASE PENSION CONTRIBUTION TO REDUCE THE NET INCOME
- MAKE ISA CONTRIBUTIONS
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller studentrechten1200. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.97. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
78252 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now