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Book Details
Abstract
“A highly comprehensive, well written book, full of helpful examples, and deservedly secure in its place as the UK’s leading tax textbook” Christopher Coles, University of Stirling
“This book is written with students in mind…This approach makes the book a very accessible introduction to the sometimes complex world of taxation” Robert Goddard, Aston Business School
Now in its 22nd annual edition, Melville’s Taxation continues to be the definitive, market-leading text on UK taxation. Featuring clean, uncluttered prose and a wealth of immensely practical examples, this text is a comprehensive guide for students taking a first level course in the subject.
This edition brings the book completely up to date with the provisions of the Finance Act 2016, including:
• Simple assessment
• Personal savings allowance
• Dividend allowance
• Restricted relief on buy-to-let loan interest
• Replacement domestic items relief
• Trivial BIKs exemption
• Extension to farmers' averaging
• Tapering of pensions annual allowance
• Revised rates of CGT
• CGT investors' relief
• IHT main residence nil-rate band
• Revised domicile rules
This book will be of value to both undergraduate and professional students of business and accounting, and will be particularly useful for students preparing for the following examinations:
ICAEW Certificate Level, Principles of Taxation; ACCA Fundamentals Level, Taxation; ACCA Technician Scheme, Foundations in Taxation; CIPFA Diploma Stage, Taxation; AAT Advanced Diploma, Personal Tax and Business Tax; ATT Certificates, Personal Taxation; Business Taxation and Accounting Principles; AIA Foundation Level, Auditing and Taxation; IFA Level 4, Tax for SMEs.
Visit www.pearsoned.co.uk/melville for our suite of resources to accompany this textbook,
· For instructors: a complete solutions guide and PowerPoint slides for each chapters
· For students: A companion website featuring opportunities for extra practice, links to relevant web pages, and additional resources
ALAN MELVILLE FCA BSc Cert Ed. is a best-selling author. Previously a Senior Lecturer at Nottingham Trent University, he has many years’ experience of teaching accounting and taxation.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Cover | cover | ||
| Title Page | iii | ||
| Copyright | iv | ||
| Contents | v | ||
| Preface | ix | ||
| Acknowledgements | x | ||
| Summary of tax data | xi | ||
| Part 1 INCOME TAX AND NATIONAL INSURANCE | 1 | ||
| Chapter 1 Introduction to the UK tax system | 3 | ||
| UK taxes | 3 | ||
| Sources of tax law | 4 | ||
| The tax year | 6 | ||
| Structure of HM Revenue and Customs | 6 | ||
| Administration of the tax system | 7 | ||
| Self Assessment | 7 | ||
| Appeals | 11 | ||
| Tax evasion | 12 | ||
| Tax avoidance | 12 | ||
| The HMRC Charter | 13 | ||
| Chapter 2 Introduction to income tax | 15 | ||
| Taxable persons | 15 | ||
| Classification of income | 16 | ||
| Exempt income | 17 | ||
| Structure of an income tax computation | 18 | ||
| Married couples and civil partners | 19 | ||
| Rates of income tax for 2016-17 | 19 | ||
| Income taxed at source | 21 | ||
| Savings income | 22 | ||
| Dividend income | 27 | ||
| Chapter 3 Personal allowances | 32 | ||
| Personal allowances for 2016-17 | 32 | ||
| The personal allowance | 33 | ||
| Blind person's allowance | 36 | ||
| Tax reducers | 36 | ||
| Married couple's allowance | 36 | ||
| Chapter 4 Payments and gifts eligible for tax relief | 43 | ||
| Payments and gifts deductible from total income | 43 | ||
| Eligible interest payments | 48 | ||
| Annual payments | 49 | ||
| Gifts of shares or property to charity | 49 | ||
| Payments which are tax reducers | 50 | ||
| Maintenance payments | 50 | ||
| Loans used to purchase a life annuity | 51 | ||
| Gifts of pre-eminent property to the nation | 51 | ||
| Gift Aid | 52 | ||
| Chapter 5 Income from property | 56 | ||
| Definition of property income | 56 | ||
| Basis of assessment and allowable expenditure | 57 | ||
| Capital expenditure | 58 | ||
| Losses | 59 | ||
| Lease premiums | 60 | ||
| Rent-a-room\" relief | 63 | ||
| Furnished holiday lettings | 63 | ||
| Chapter 6 Income from savings and investments | 68 | ||
| Interest received | 68 | ||
| Dividends received | 70 | ||
| Tax-efficient investments | 71 | ||
| Individual Savings Accounts | 71 | ||
| Enterprise Investment Scheme | 73 | ||
| Venture Capital Trusts | 74 | ||
| Child Trust Funds | 75 | ||
| Income from trusts and settlements | 76 | ||
| Miscellaneous income | 79 | ||
| Chapter 7 Income from employment (1) | 82 | ||
| Employment and self-employment | 82 | ||
| Basis of assessment | 85 | ||
| Employment income | 85 | ||
| Non-taxable employment income | 86 | ||
| Deductible expenses | 88 | ||
| Payments made on termination of employment | 91 | ||
| The PAYE system | 93 | ||
| Construction industry scheme | 97 | ||
| Employee incentive schemes | 98 | ||
| Chapter 8 Income from employment (2) | 103 | ||
| Benefits in kind | 103 | ||
| Living accommodation | 105 | ||
| Cars provided for private use | 108 | ||
| Beneficial loans | 112 | ||
| Chapter 9 Income from self-employment: Computation of income | 116 | ||
| The badges of trade | 116 | ||
| The calculation of trading profits | 118 | ||
| Deductibility of expenditure | 119 | ||
| Disallowed expenditure | 119 | ||
| Allowable expenditure | 122 | ||
| Adjustments relating to income | 124 | ||
| Trading income allowance | 125 | ||
| Cash basis and simplified expenses | 126 | ||
| Chapter 10 Income from self-employment: Basis periods | 132 | ||
| The current year basis | 132 | ||
| Commencement of trade | 133 | ||
| Cessation of trade | 136 | ||
| Change of accounting date | 138 | ||
| Averaging of trading profits for farmers and creative artists | 143 | ||
| Chapter 11 Income from self-employment: Capital allowances | 149 | ||
| Eligible expenditure | 149 | ||
| Chargeable periods | 149 | ||
| Plant and machinery | 150 | ||
| Capital allowances on plant and machinery | 152 | ||
| Writing down allowance | 153 | ||
| Annual investment allowance | 156 | ||
| First year allowance | 158 | ||
| Balancing allowances and charges | 161 | ||
| Non-pooled assets | 161 | ||
| Allowances on cessation of trade | 166 | ||
| Miscellaneous capital allowances | 167 | ||
| Chapter 12 Income from self-employment: Trading losses | 173 | ||
| Relief for trading losses | 173 | ||
| Carry-forward trade loss relief | 174 | ||
| Trade loss relief against total income | 176 | ||
| Early trade losses relief | 179 | ||
| Terminal trade loss relief | 181 | ||
| Post-cessation trade relief | 183 | ||
| Transfer of a business to a company | 183 | ||
| Losses on shares in unlisted trading companies | 183 | ||
| Limit on income tax reliefs | 184 | ||
| Chapter 13 Income from self-employment: Partnerships | 187 | ||
| Principles of partnership taxation | 187 | ||
| Notional profits and losses | 190 | ||
| Change in partnership composition | 191 | ||
| Non-trading income | 193 | ||
| Trading losses | 194 | ||
| Chapter 14 Pension contributions | 199 | ||
| Registered pension schemes | 199 | ||
| Tax relief for contributions by scheme members | 201 | ||
| Tax relief for contributions by employers | 204 | ||
| Annual allowance charge | 206 | ||
| Lifetime allowance charge | 209 | ||
| Chapter 15 Payment of income tax, interest and penalties | 214 | ||
| Payment of income tax | 214 | ||
| Late payment penalties | 217 | ||
| Interest on overdue income tax | 218 | ||
| Interest on overpaid income tax | 219 | ||
| Penalties | 219 | ||
| Chapter 16 National Insurance contributions | 223 | ||
| Class 1 | 223 | ||
| Class 1A | 229 | ||
| Class 1B | 229 | ||
| Class 2 | 230 | ||
| Class 3 and 3A | 230 | ||
| Class 4 | 231 | ||
| Annual maximum contributions | vi | ||
| Review questions (Set A) | 236 | ||
| Part 2 CAPITAL GAINS TAX | 245 | ||
| Chapter 17 Introduction to capital gains tax | 247 | ||
| Chargeable persons | 247 | ||
| Chargeable assets | 248 | ||
| Chargeable disposals | 249 | ||
| Basis of assessment | 250 | ||
| Rates of CGT | 251 | ||
| Relief for capital losses | 253 | ||
| Relief for trading losses | 255 | ||
| Administration of CGT | 257 | ||
| Chapter 18 Computation of gains and losses | 261 | ||
| Layout of a CGT computation | 261 | ||
| Disposal value | 262 | ||
| Allowable expenditure | 262 | ||
| Part disposals | 264 | ||
| Assets with negligible value | 266 | ||
| Assets held on 31 March 1982 | 267 | ||
| Chapter 19 Chattels and wasting assets | 271 | ||
| The chattels exemption | 271 | ||
| Chattels disposed of at a loss | 273 | ||
| Part disposals of chattels | 273 | ||
| Wasting chattels | 276 | ||
| Wasting assets | 277 | ||
| Leases | 279 | ||
| Chapter 20 Shares and securities | 288 | ||
| The share matching rules | 288 | ||
| The Section 104 holding | 290 | ||
| Bonus issues | 293 | ||
| Rights issues | 294 | ||
| Capital distributions | 296 | ||
| Takeovers | 298 | ||
| Gilts and qualifying corporate bonds | 300 | ||
| Chapter 21 Principal private residence | 304 | ||
| Principal private residence | 304 | ||
| Partial exemption | 305 | ||
| Deemed residence | 306 | ||
| Letting relief | 308 | ||
| Business use | 310 | ||
| Chapter 22 CGT reliefs | 313 | ||
| Damaged assets | 313 | ||
| Destroyed assets | 316 | ||
| Replacement of business assets | 317 | ||
| Gift of business assets | 320 | ||
| Transfer of a business to a limited company | 322 | ||
| Entrepreneurs' relief | 323 | ||
| Reinvestment into EIS shares | 326 | ||
| Loans to traders | 327 | ||
| Review questions (Set B) | 330 | ||
| Part 3 CORPORATION TAX | 335 | ||
| Chapter 23 Introduction to corporation tax | 337 | ||
| Scope of corporation tax | 337 | ||
| Accounting periods | 338 | ||
| Taxable total profits | 339 | ||
| Trading income | 340 | ||
| Income from property | 345 | ||
| Income from non-trading loan relationships | 345 | ||
| Dividends received | 347 | ||
| Relief for charitable donations | 347 | ||
| Loan relationships | 348 | ||
| Long periods of account | 352 | ||
| Research and development tax relief | 354 | ||
| Intangible fixed assets | 355 | ||
| Chapter 24 Corporate chargeable gains | 359 | ||
| Chargeable disposals and chargeable assets | 359 | ||
| Basis of assessment | 360 | ||
| Computation of gains and losses | 360 | ||
| Indexation allowance | 361 | ||
| Assets held on 31 March 1982 | 364 | ||
| The rebasing election | 367 | ||
| Assets acquired before 6 April 1965 | 367 | ||
| Disposals of shares or securities | 368 | ||
| Disincorporation relief | 376 | ||
| Chapter 25 Computation and payment of the corporation tax liability | 381 | ||
| Corporation tax financial years | 381 | ||
| Rates of corporation tax | 382 | ||
| Due date of payment | 383 | ||
| Accounting for income tax deducted at source | 386 | ||
| Shadow ACT | 386 | ||
| Self Assessment | 387 | ||
| Interest on underpaid and overpaid corporation tax | 388 | ||
| Penalties | 390 | ||
| Corporation tax rates prior to FY2015 | 392 | ||
| Chapter 26 Corporation tax losses | 398 | ||
| Relief for trading losses | 398 | ||
| Carry forward of trade loss relief | 399 | ||
| Unrelieved charitable donations | 400 | ||
| Trade loss relief against total profits | 402 | ||
| Repayments of corporation tax | 405 | ||
| Anti-avoidance legislation | 407 | ||
| Choice of loss relief | 407 | ||
| Non-trading losses | 408 | ||
| Chapter 27 Close companies and investment companies | 412 | ||
| Close companies | 412 | ||
| Definition of a close company | 412 | ||
| Exceptions | 415 | ||
| Consequences of close company status | 416 | ||
| Close investment-holding companies | 419 | ||
| Companies with investment business | 419 | ||
| Choice of business medium | 420 | ||
| Incorporation | 425 | ||
| Chapter 28 Groups of companies and reconstructions | 428 | ||
| Related 51% group companies | 428 | ||
| Transfer pricing | 431 | ||
| 51% groups | 431 | ||
| 75% groups | 432 | ||
| Group relief | 433 | ||
| Transfer of chargeable assets within a group | 436 | ||
| Capital losses | 438 | ||
| Consortia | 439 | ||
| Company reconstructions | 441 | ||
| Review questions (Set C) | 444 | ||
| Part 4 MISCELLANEOUS | 451 | ||
| Chapter 29 Value added tax (1) | 453 | ||
| The principle of VAT | 453 | ||
| Taxable persons | 454 | ||
| Taxable supplies | 454 | ||
| Exempt supplies | 456 | ||
| Reduced rate supplies | 457 | ||
| Zero rate supplies | 457 | ||
| The value of a supply | 458 | ||
| Imports and exports | 461 | ||
| Registration | 463 | ||
| Deregistration | 468 | ||
| Chapter 30 Value added tax (2) | 471 | ||
| Accounting for VAT | 471 | ||
| The tax point | 472 | ||
| Tax invoices | 472 | ||
| Accounting records | 473 | ||
| Special schemes | 474 | ||
| Retail schemes | 477 | ||
| Bad debts | 478 | ||
| Non-deductible input tax | 479 | ||
| Partial exemption | 481 | ||
| Administration of VAT | 483 | ||
| Penalties, surcharges and interest | 485 | ||
| Chapter 31 Inheritance tax | 490 | ||
| Chargeable transfers of value | 490 | ||
| Exempt transfers | 492 | ||
| Potentially exempt transfers | 494 | ||
| IHT payable on chargeable lifetime transfers | 496 | ||
| IHT payable on death | 498 | ||
| Valuation | 504 | ||
| Business property relief | 506 | ||
| Agricultural property relief | 507 | ||
| Administration of IHT | 507 | ||
| Chapter 32 Overseas aspects of taxation | 511 | ||
| Residence and domicile | 511 | ||
| Income tax - general rules | 514 | ||
| Double taxation relief | 515 | ||
| Income from employment | 516 | ||
| Trading income | 518 | ||
| Income from property and investments | 519 | ||
| Capital gains tax - general rules | 520 | ||
| Inheritance tax - general rules | 521 | ||
| Corporation tax - general rules | 521 | ||
| Controlled foreign companies | 524 | ||
| Double taxation relief for companies | 525 | ||
| Diverted profits tax | 529 | ||
| Review questions (Set D) | 532 | ||
| Part 5 ANSWERS | 539 | ||
| Answers to exercises | 541 | ||
| Answers to review questions | 593 | ||
| Index | 605 |