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Hi there,
I have a few questions I hope you can answer for me:
1) In the final year of trade, would a balancing charge increase or decrease a tax adjusted trading loss?
2) If an employee repays a taxable loan from say £70,000 to below £5,000, would the benefit be computed any differently using the average/strict method given that is has gone below £5,000?
3) In question 13 of the BPP kit, you are asked to calculate the balancing payment for an employee. In which circumstance would this occur? I thought the personal allowance would simply be adjusted in the next tax year and balancing payments only related to self-employed people.
4) If less than £100,000 is spent on long-life assets, do they get thrown into the main pool instead?
5) If companies happen to receive rental income from a furnished property, are they still entitled to a wear and tear allowance as per individuals?
6) Under gift relief, if you pay less than cost for an asset, what would your base cost be? MV on date of gift less gift relief less price paid?
Many thanks!
1) Decrease-as balancing charges are taxable
2) No the loan has to be kept at £5000 or below throughout the whole tax year
3) Employees can have other sources of income which need to be self assessed e.g property income or higher rate/additional rate tax on interest and dividends
4) Yes after AIA is considered
5)Yes
6) The whole gain could be deferred as there is nothing chargeable now on the donor. The base cost is MV less gain deferred
Hope this helps
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