Cemap 1 - Topic 3

Front 1

What is Domicile

Back 1

Domicile is best described as the country that an individual treats as their home, even if They were to live for a time in another country. You acquire domicile of origin at birth

Front 2

Why is Domicile important?

Back 2

Domicile mainly effects liability to inheritance tax.

If a person is domiciled in the UK, inheritance tax is chargeable on assets anywhere in the world. Whereas for persons not domiciled in the UK, tax is due only on assets in the UK.

Front 3

Does a child pay income tax?

Back 3

Yes, any earning currently exceeds the personal allowance. The settlement from their parents will be taxed as the parents income. The educational grant is tax-free or they would not pay taxing all of their earned income, only that which exceeds personal loans.

Front 4

How do employees pay Tax

Back 4

Pay as you earn system (PAYE)

Front 5

When is the P60 issued by the employer?

Back 5

P60 is issued each employee by the employer in May each year

Front 6

What should your old employer supply when you are leaving the job?

Back 6

Provided with a form P45. The P45 provides the new employer with all the information they required to complete a new tax deductions, work and sheet for the employee.

Front 7

A person who is UK resident for tax purposes only pay income tax on earnings generating UK. True or false?

Back 7

False. They are liable for income tax on income generated anywhere in the world but the UK has reciprocal tax treaties. Double taxation agreements with many countries to ensure that people are not taxed twice on the same income.

Front 8

A person may become UK domiciled once they have been settled in a country for a number of years? True or false?

Back 8

True, as long as the actions indicate that the change of residence is permanent and they have served links with the original country of domicile.

Front 9

What is NOT accessible for income tax purposes?

Back 9

Lottery prizes

Front 10

In what order of priority is income taxed?

Back 10

Non-savings income, then savings income, then dividend income

Front 11

Blind persons allowance can be transferred to a spouse or civil partner if the blind person does not use the allowance. True or false?

Back 11

True. Blind persons allowance can be transferred to a spouse civil partner if the original recipient does not pay, tax or use all their allowance.

Front 12

Emma worked abroad for 5 years but is now back working UK. What class of national insurance contributions could she pay to improve the contribution wreck of the state pension?

Back 12

Class 3

Front 13

Explain the difference between residents and domicile?

Back 13

Residency is where one choose to live. Domicile is more permanent is essentially somebody's home base.

Front 14

National insurance contributions classified by:

Back 14

Class 1- paid by employees by percentage of income.

Class 2- flat rate contribution from self employed.

Class 3- voluntary contribution. A person has taken a break or spent time overseas.

Class 4- self employed and tax on annual profits. Paid to HMRC by self assessment.

Front 15

Definition of a UK tax resident?

Back 15

Someone who lives in the UK for 183 or more days in a tax year

Front 16

The starting rate of income tax applies to:

Back 16

Interest from savings

Front 17

Paula is at higher rate taxpayer who makes charitable donation through gift aid. This means:

Back 17

Paula's basic rate income tax threshold will be extended by the gross amount of this gift.

Front 18

The personal savings allowance is not available to who?

Back 18

Additional rate taxpayers

Front 19

For how many years must he have been a UK tax resident to be deemed domicile?

Back 19

15 of the last 20 years.