BPP University College Of Professional Studies Limited (BPP)
Notes on Tax (Business Law & Practice) for the LPC at BPP University. These revision notes summarise key SGS course content in a way that is easy to understand and helped me achieve 95% on the BLP exam.
BPP University College Of Professional Studies Limited (BPP)
Legal Practice Course
Business Law and Practice
All documents for this subject (43)
3
reviews
By: rachybailey • 2 year ago
By: studybear82341 • 3 year ago
By: tipak • 3 year ago
Seller
Follow
lpc-exam-notes
Reviews received
Content preview
BPP LPC – Tax Revision Notes
PART 1 – General Principles
Income vs Capital
- If a receipt is the product of how the taxpayer generates money on a regular basis this will be
classified as an income receipt.
- If a receipt is the product of a transaction that is not integral to such regular activity this is
likely to be classified as a capital receipt. “One-off” transactions.
- Individuals are assessed to income tax and capital gains tax on the basis of a tax year which
runs from 6 April – 5 April.
- Companies are assessed to corporation tax on the basis of a financial year which runs from
1 April – 31 March (although companies can choose an accounting period that does not match
the financial year).
PART 2 – Income Tax Calculation
1) TOTAL INCOME = (Gross income from all sources)
2) LESS available tax reliefs (interest on qualifying loans and pension contributions)
= NET INCOME
3) LESS Personal Allowance * = TAXABLE INCOME
4) Calculate whether the personal savings allowance is available - (look at Taxable Income to see
which income tax band it ends in).
5) Split the Taxable Income into non-savings, savings and dividend income.
Non-savings income = Taxable income – savings income – dividend income.
6) Apply relevant tax rates: Non-savings à savings à dividend (NB £2000 dividend allowance)
7) Add together the amounts of tax from (6) à Total income tax liability
* Remember to reduce PA by £1 for every £2 of net income above £100,000. If Net Income is
£125,000 or more, no PA is available. Allowance = £12,500 – ((Net income - £100,000) / 2)
PART 3 – Capital Gains Tax Calculation
1) Sale proceeds/Market Value
2) LESS disposal expenditure = NET SALE PROCEEDS
3) LESS initial expenditure LESS subsequent expenditure = TOTAL CHARGEABLE GAIN
4) LESS annual exemption (12,300)
LESS carried forward or carried-across losses
= TAXABLE CHARGEABLE GAIN
5) Apply CGT to the Taxable Chargeable Gain at one of the following rates:
o 10% if ER applies
o 10% if taxable income plus taxable chargeable gain (or any part of gains) within basic
rate tax threshold
o 20% if taxable income plus gains exceeds basic rate threshold.
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 lpc-exam-notes. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.54. You're not tied to anything after your purchase.
