Capital Gains Tax (CGT) is a tax on the profit realized from the sale of certain types of assets, occurring at different rates depending on asset type and overall taxable income. This tax plays a significant role in tax planning for investors and businesses.
A comprehensive guide to understanding the Dividend Tax in the UK, which was introduced in April 2016 to replace the previous tax credit system.
The effective tax rate represents the average rate at which an individual or a corporation is taxed on earned income.
An in-depth overview of the financial year, including definitions, examples, related terms, online resources, and suggested reading materials.
Income splitting involves distributing income among family members, trusts, or various business entities to potentially benefit from lower tax rates or threshold amounts. This practice is commonly associated with filing joint returns for married couples but can also include giving income property to children or utilizing multiple trusts or business structures.
Income tax schedules refer to detailed tables that list the tax rates or tax brackets applicable to various ranges of income levels. These schedules are used to determine the amount of tax payable by individuals and corporations.
Marital status refers to the legal standing of an individual's relationship in the eyes of the law, which directly impacts the kind of tax return they file. This can be single, joint, married filing separately, or head of household. Different tax rates and benefits apply to these various statuses.
MIL, often expressed as MILL, represents one-tenth of a cent. The term is primarily used in expressing tax rates on a per-dollar basis. For example, a tax rate of 60 mills implies that taxes are 6 cents per dollar of assessed valuation.
Ordinary income refers to normal income earned by individuals, such as wages, interest, and rents, which is fully subject to regular income tax rates. This contrasts with capital gains, which often benefit from reduced tax rates.
Stamp Duty Land Tax (SDLT) is a tax charged on the purchase price of property or land in the UK. The rates and thresholds vary depending on several factors such as property value, type, and buyer's status.
The starting rate of income tax was a former rate of income tax in the UK, set below the basic rate of income tax. It replaced the lower rate in 1999 and was abolished in April 2008.
A surviving spouse refers to a widow or widower who outlives their partner. In tax terms, a surviving spouse may file a joint return with the deceased spouse in the year of death and use joint return tax rates for two years following the spouse's death if certain conditions are met.
