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Cheatsheets Tax Law SQE1 - FLK1 + 2
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Cheatsheets Tax Law SQE1 - FLK1 + 2 - Income Tax - Capital Gains Tax - Corporation tax - Inheritance tax - VAT and SDLT
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the documents downloaded do not seem to be completed. have checked the previous reviews and the seller di offer sendinfg the pdfs. seller could you please reach ot to send the pdfs completed as some information is cuttoff from the docuuments downloadeed
By: benveversaberdeen • 1 year ago
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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
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