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Über dieses Buch

The 40th annual edition of the leading guide to taxation in Britain. This practical and user-friendly guide is a bestseller with students, professionals, accountants and private individuals; explaining in simple terms how the UK tax system works and how best to minimise tax liabilities.

Inhaltsverzeichnis

Frontmatter

Chapter 1. This year’s Tax changes

Abstract
This chapter summarises many of the changes to the tax rules and rates which take effect for 2011–12. Also included are some important changes announced for future years. Some were introduced by this year’s Budget and Finance Bills, whilst others were announced and enacted previously. Tax planning pointers have been included in italics and these are amplified in Chapter 26. At the end of this chapter you will find a table of key rates and allowances for 2011–12.
Walter Sinclair, Barry Lipkin

Chapter 2. The Basis of Your Tax Liability

Abstract
Individuals, partnerships, estates, trusts, companies, and certain other organisations that are resident in the UK are taxable on their income arising here. They are also liable on income arising abroad subject to the rules outlined later in this book. The taxation of the income of individuals is covered first partnerships, estates, trusts and companies being dealt with in later chapters.
Walter Sinclair, Barry Lipkin

Chapter 3. Personal reliefs

Abstract
According to your circumstances you can claim certain personal tax reliefs which are deducted from your total income in arriving at the amount on which you pay income tax.
Walter Sinclair, Barry Lipkin

Chapter 4. Annual Interest and other Payments

Abstract
It is important as an individual taxpayer to ascertain whether or not you have an obligation to deduct income tax from any interest or other recurring payments which you propose to make. Subject to the detailed rules, a useful guideline is to check the position before making payments to overseas residents or any payments (other than UK interest) which are for commercial purposes.
Walter Sinclair, Barry Lipkin

Chapter 5. Computing Your Income Tax Bill

Abstract
Your ‘total income’ (see below) less your allowances for the tax year (3.0) will be subjected to income tax at the basic higher and additional rates according to the following table:
Walter Sinclair, Barry Lipkin

Chapter 6. Husband, Wife, Civil Partners and Children

Abstract
This chapter deals, in particular, with the taxation of husband and wife as from 6 April 2000. From 5 December 2005, the rules generally also apply to civil partners (6.9). The concept of the present independent taxation system goes back to 6 April 1990 and reference should be made to previous editions of this book for intervening changes or for the rules which applied for 1989– 90 and earlier years. The latter included an optional form of separate taxation of spouses, which merely allocated their joint liability, and an elective form of truly separate taxation limited to a wife’s earnings. (Some of the rules for independent taxation have been mentioned in Chapter 3.)
Walter Sinclair, Barry Lipkin

Chapter 7. Income from Land and Property

Abstract
The amount of income that you derive during the tax year from letting property such as a house, flat, factory or shop, less the deductions you may claim represent your net income from letting property and must be shown separately on your tax return. You must return your gross property income including certain lease premiums and also give full particulars of your expenses. If up to 5 April 1995 the income was derived from furnished lettings then the assessment was under Schedule D Case VI (15.1); otherwise it was generally under Schedule A. From that date to 31 March 2009, Case VI on furnished lettings only continued for corporation tax purposes.
Walter Sinclair, Barry Lipkin

Chapter 8. Income from Dividends and Interest

Abstract
This chapter broadly covers savings income and dividends, including certain tax efficient investments. From 6 April 2005 the legislation contained in ICTA and subsequent Finance Acts was broadly consolidated into ITTOIA Ss365– 573 and Parts 5–7 of Sch 2 and references to schedules for income no longer apply although the basic rules remain.
Walter Sinclair, Barry Lipkin

Chapter 9. Life Assurance

Abstract
Earlier in this book, certain tax aspects of life assurance are touched on. This chapter deals with them in more detail, together with related subjects such as permanent health insurance and purchased life annuities.
Walter Sinclair, Barry Lipkin

Chapter 10. Income from Employments and Paye

Abstract
The taxation of your income from employments or from any office that you hold derives mainly from earlier legislation. Until 5 April 2003, such income was normally taxed under Schedule E and generally a receipts basis applied (10.13). Schedule E was divided into three ‘Cases’ which focused on your resident, ordinarily resident and domiciliary status (TA S19).
Walter Sinclair, Barry Lipkin

Chapter 11. Income from Businesses and Professions

Abstract
The profits from trades, professions and vocations were normally assessed for 2004–05 and previous years under Schedule D Case I (trades) and Schedule D Case II (professions and vocations). However, from 2005–06 onwards, with the introduction of ITTOIA (2.10), the income is no longer classified for income tax purposes into schedules, although the basic rules remain. (ITTOIA does not apply for corporation tax purposes.) There are certain special rules which apply to partnerships (Chapter 12) and companies (Chapter 13).
Walter Sinclair, Barry Lipkin

Chapter 12. Partnerships

Abstract
Special rules relate to the taxation of partnerships and these are covered in the following sections. Note that the present system operates generally from 1997–98 and for partnerships starting after 5 April 1994 (12.2). From 2005– 06, rewritten legislation is applied by Ss846–863 in ITTOIA (2.10).
Walter Sinclair, Barry Lipkin

Chapter 13. Companies

Abstract
The following is a general outline of the taxation of companies that are resident in the UK or are trading here through a branch or agency. In the latter case it is normally only the profits arising in this country that are taxable here. It must be stressed that the actual provisions are lengthy and many details have been omitted in this summary. Note that ITTOIA (2.10) has no effect for corporation tax purposes. However, consolidating corporation tax legislation (CTA 2009 and 2009–10) has been introduced.
Walter Sinclair, Barry Lipkin

Chapter 14. Pensions

Abstract
With the increase in life expectancy and the decrease in the average age of retirement, pension planning grows in importance. You will need to plan for a longer retirement and should aim to receive an adequate pension during that period.
Walter Sinclair, Barry Lipkin

Chapter 15. Miscellaneous Aspects

Abstract
The consolidating and rewriting statutes, ITTOIA (2.10), ITA 2007 and CTA 2009 have now eliminated the classification of income under the previous schedules and cases, Schedule D Case VI being particularly relevant to this chapter. Although the basic rules have largely continued, each type of income taxable under miscellaneous profits is now specified in law, rather than swept up by exception. Such income includes:
Walter Sinclair, Barry Lipkin

Chapter 16. Returns, Assessments and Repayment Claims

Abstract
This chapter covers administrative matters, largely to be found in the Taxes Management Act 1970 (TMA). With effect from 1996–97, radical changes took effect, with the introduction of the new self-assessment system. This is dealt with below.
Walter Sinclair, Barry Lipkin

Chapter 17. Domicile and Residence

Abstract
Certain fundamental aspects of the UK taxation of non-residents and non-domiciliaries were under discussion between HMRC and professional bodies before the May 2010 General E0lection. Proposals for further changes operative from 6 April 2012 were announced in outline by the new Government in the March 2011 Budget, but only on 17 June 2011 were detailed principles revealed by way of consultative documents. These are open for comment until 9 September, responses are due to be published in the autumn, followed later in 2011 by draft legislation, which is due to be included in Finance Bill 2012.
Walter Sinclair, Barry Lipkin

Chapter 18. Tax on Foreign Income

Abstract
Many UK residents who are not domiciled in any part of the UK or are not ordinarily resident here have hitherto enjoyed the facility to pay tax in respect of certain foreign income and gains by reference to amounts actually or deemed to be remitted to the UK in each tax year, rather than by reference to the amounts arising for the year.
Walter Sinclair, Barry Lipkin

Chapter 19. Non-Residents, Visitors and Immigrants

Abstract
This chapter has been kept as short as possible, in order to provide a simplified introduction to the UK’s approach to taxing your income, if you are a non-resident, visitor or immigrant. We have many more taxes, for which you should refer to the relevant chapters.
Walter Sinclair, Barry Lipkin

Chapter 20. Capital Gains Tax

Abstract
FA 2008 includes major changes to the capital gains tax rules which apply to individuals, trustees and personal representatives, but not companies. For disposals after 5 April 2008, there is a rate of 18 per cent, indexation was withdrawn, as was taper relief. Furthermore, all assets held on 31 March 1982 are deemed to be acquired on that date at market value. However, from 23 June 2010, there is also an additional rate of 28 percent.
Walter Sinclair, Barry Lipkin

Chapter 21. The Taxation of Trusts and Estates

Abstract
A trust is brought into existence when a person (the settlor) transfers assets to trustees for the benefit of third parties (the beneficiaries). Another word for a trust is a settlement. A trust may also be created under a will when a person (the testator) sets aside the whole or a portion of his estate to be administered (by trustees) for the benefit of his heirs or other beneficiaries. (Where an individual declares himself to be a trustee of certain of his assets a trust will also come into existence.)
Walter Sinclair, Barry Lipkin

Chapter 22. Inheritance Tax

Abstract
This chapter deals with what was originally known as capital transfer tax, but following sweeping changes in the 1986 Finance Act was renamed inheritance tax. The name applies from 25 July 1986. However, the inheritance tax rules cover transfers on and after 18 March 1986.
Walter Sinclair, Barry Lipkin

Chapter 23. An Outline of Vat

Abstract
VAT was introduced into the UK on 1 April 1973 with an original rate of 10 per cent. On 18 June 1979 a single rate of 15 per cent replaced the then 8 per cent standard and 121⁄2 per cent higher rates. This rate was increased to 171⁄2 per cent from 1 April 1991 (5 per cent now applying in isolated cases – 23.15). As a temporary measure, the standard rate was reduced to 15 per cent from 1 December 2008 reverting to 171⁄2 per cent on 1 January 2010. To combat abuse of the temporary reduction, a supplementary charge of 21⁄2 per cent applied from 25 November 2008 to specified cases of supply to customers who cannot recover all the VAT or from 1 April 2009 where abnormal prepayments occurred.
Walter Sinclair, Barry Lipkin

Chapter 24. Stamp Duty

Abstract
Stamp duty is perhaps the most modest of capital taxes although the ‘take’ has been increasing. However, even though the rates are very low, stamp duty is likely to arise on some of your major capital transactions and could involve signif cant sums. Therefore a brief outline is given below. This concentrates on the ad valorem duties, which are charged according to the value of a transaction, rather than the less important fixed duties.
Walter Sinclair, Barry Lipkin

Chapter 25. Social Security

Abstract
The main social security legislation is now comprised in the Social Security Acts of 1992 and supporting statutory instruments and amendments. The subject is a wide one and only an outline is given below.
Walter Sinclair, Barry Lipkin

Chapter 26. Tax-Saving Hints

Abstract
The following pages deal with various ways in which you can arrange your affairs to reduce your tax bill. This should not be done by tax evasion which is completely illegal (15.10) and may result in your tax bill being increased by the addition of interest and penalties (16.9.2). You should always fully disclose your taxable income to HMRC in your income tax return (16.2).
Walter Sinclair, Barry Lipkin

Chapter 27. Tax Tables

Abstract
27.1 Income tax table for 2011–12
Walter Sinclair, Barry Lipkin

Backmatter

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