Taxation Test Questions

1. What is meant by direct, and what is indirect, taxation?

2. What is a tax year?

3. What, in brief, is meant by 'the budget'?

4. What are the two most common deductions that may be made from gross income to arrive at a figure for income that is assessable to income tax?

5. Discover the current rates of personal allowances.

6. Apart from personal allowances, what other allowances may be claimed in appropriate circumstances, and what is the term used to describe the residue of income after deduction of allowances?

7. What is the present basic rate of income tax? Beyond what level of net taxable income is tax at higher rates payable?

8. Give examples of income that is exempt for purposes of income tax.

9. What is meant by a 'progressive' tax?

10. What is the investment income surcharge, and in what circumstances is it payable?

11. How is a 'tax code' determined for purposes of PAYE?

12. What is corporation tax?

13. What is meant by the term 'rateable value'?

14. Explain why identical houses and gardens may be allocated different rateable values.

15. Reassessments of properties are made at infrequent intervals. In periods when house prices and market rents are rising rapidly, what effect does this have on the amount of rates actually paid by the householders?

16. To whom are household rates payable?

17. For what purpose are they needed?

18. What is meant by the 'revenue expenditure' of a local authority? How would the construction of a new town hall normally be financed?

19. What are the two direct taxes on capital that mainly apply to private individuals?

20. What capital profits may one make in a tax year without attracting capital gains tax?

21. Give examples of assets on the sale of which a private person will incur no liability for CGT.

Capital Transfer Tax

The old death duties (estate duty) were abolished in 1974/75 and were replaced by capital transfer tax. CTT is designed not only to tax large estates of deceased persons but also to prevent avoidance of such tax by a person's giving away his estate before he dies. CTT is payable both on transfer of assets at death and on transfers during life, albeit at a lower rate. It is payable by the recipient unless the transfer is made 'free of CTT'.

Capital transfer tax is a complex subject and here we shall do little more than outline the principles in order to give the reader a complete bird's-eye-view... see: Capital Transfer Tax

Personal And Business Finance 2018

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