税收英语05综述课件

Chapter5SocialsecuritycontributionOverviewofsocialsecuritycontributionThepayrolltaxinU.S.ThenationalinsurancecontributioninUK

Chapter5SocialsecuritycontributionSocialsecuritycontributionsareactualcontributionsreceivablebysocialsecurityschemesorganizedandoperatedbygovernmentunitsforthebenefitofthecontributorstothescheme.5.1OverviewofsocialsecuritycontributionManycountriesprovidepubliclyfundedretirementorhealthcaresystems.Inconnectionwiththesesystems,thecountrytypicallyrequiresemployersand/oremployeestomakecompulsorypayments.Thesepaymentsareoftencomputedbyreferencetowagesorearningsfromself-employment.5.1OverviewofsocialsecuritycontributionTaxratesaregenerallyfixed,butadifferentratemaybeimposedonemployersthanonemployees.Somesystemsprovideanupperlimitonearningssubjecttothetax.Afewsystemsprovidethatthetaxispayableonlyonwagesaboveaparticularamount.Suchupperorlowerlimitsmayapplyforretirementbutnothealthcarecomponentsofthetax.5.2PayrolltaxesinU.S.(federal)FederalInsuranceContributionsAct(FICA)taxisaUnitedStatesFederalpayroll(oremployment)taximposedonbothemployeesandemployerstofundSocialSecurityandMedicare.5.2PayrolltaxesinU.S.(federal)Federalprogramsthatprovidebenefitsforretirees,thedisabled,andchildrenofdeceasedworkers.SocialSecuritybenefitsincludeold-age,survivors,anddisabilityinsurance(OASDI);Medicareprovideshospitalinsurancebenefitsfortheelderly.Theamountthatonepaysinpayrolltaxesthroughoutone'sworkingcareerisassociatedindirectlywiththesocialsecuritybenefitsannuitythatonereceivesasaretiree

5.2PayrolltaxesinU.S.(federal)Federalpayrolltaxes,orsocialinsurancecontributions,consistoftaxrevenuesfrom:SocialSecurity,Medicarehospitalinsurance,Unemploymentinsurance,Railroadretirement,andotherretirementSocialsecuritycomprisesthelion’sshareoffederalpayrolltaxes(1)SocialSecurity

SocialSecurity(OASDI,orOldAge,Survivors,andDisabilityInsurance)beganinthelate1930sasamandatoryold-ageinsuranceprogramformostemployeesintheprivatesectorOvertime,theprogramwasexpandedtoincludedisabilityinsuranceandmandatorycoverageforalmostallworkers(1)SocialSecurityTheSocialSecurityActof1935providedmonthlybenefitstoretiredworkerscoveredbySocialSecurity.In1939,benefitswereextendedtothedependentsandsurvivorsofcoveredworkersTheprogramwasfurtherexpendedtoprovidedisabilityinsurancetocoveredworkersandtheirdependentsin1956and1958,respectively(1)SocialSecurityBenefitsearnedbycoveredworkersarefinancedprimarilybyapayrolltaxonaworker’swagesBoththeemployeeandtheemployerpaytaxesbasedontheworker’searningsuptoamaximumamountortaxablemaximumearningsbase(1)SocialSecurityIn2010,thetaxrateforboththeemployeeandemployeris6.2%ofgrosscompensationuptoalimitof$106,000ofcompensation.Theself-employedpersonsubjectto12.4percent.Thislimit,knownastheSocialSecurityWageBase,goesupeachyearbasedonaveragenationalwagesand,ingeneral,atafasterratethantheConsumerPriceIndex

(2)Medicare

hospitalinsurance(HI)Thisprogramisfinancedprimarilythroughpayrolltaxes,provideshospitalizationbenefitstoeligiblepersonsTheHItaxrateis1.45percentonallcoveredearningsBoththeemployeeandtheemployerpaythistaxrate,andself-employedpersonspaythecombinedtaxrate.(3)Unemploymentinsurance

Unemploymentinsurance(UI)payrolltaxesareusedtofinanceunemploymentbenefitsforworkersinvoluntarilyunemployedTherearetwopartstotheUIpayrolltaxesTheFederalUnemploymentTaxAct(FUTA)taxThestatetaxFUTAcurrentlyimposesa6.2%onthefirst$7000paidannuallybycoveredemployerstoeachemployee(4)Railroadretirement

TheretirementsystemhastwotiersthatarefinancedbyfederalpayrolltaxesThetier1taxrateisequivalenttothecombinedsocialsecurityandMedicareHItaxrate,bothemployeeandemployerpaytaxesoncoveredwagesuptotheapplicablemaximumtaxableearnings.Undertier2,theemployer’scontributionsaremuchgreater.MainissuesonFederalpayrolltaxesProgressivevs.regressiveFlatrateMaximumtaxableearningsbaseMainissuesonFederalpayrolltaxesInanefforttoincreasetheprogressivityofSocialSecurity,theearnedincometaxcredit(EITC)wasintroducedin1975Taxburdenofmiddleclassgroups5.3ThenationalinsurancecontributioninUK

thescopeofnationalinsurance1Scopeofnationalinsurancecontribution(NIC)Class1.Primary,paidbyemployeesSecondary:Calss1Aandclass1BpaidbyemployersClass2--paidbytheself-employedClass3--voluntarycontributionClass4--paidbytheself-employedClassI

NICsEarningsEarningsbroadlycomprisegrosspayEmployees

12%foremployeesbetweentheearningsthresholdof£7,225andtheupperearningslimitof£42475peryear2%abovetheupperearningslimitEmployers

13.8%abovetheearningsthresholdof£7072,thereisnoupperlimitClass1ANICsClass1AarepayablebyemployersonbenefitsprovidedforemployeesEmployerpaid13.8%onthetaxablebenefitsNocontributionsareleviedwhenanemployeeisearninglessthan£8500ayearExampleMrTyeisanemployeeofTavernerplc.£Salaryfor2011/1245,000BenefitsperP11D6,450RequiredWhataretheClassIandClassIANICliabilities?

ExampleClass1–primary42,475–7,225@12%=4,23045,000–42,475@2%=50

4,280Class1–secondary45,000–7,072@13.8%=5,234Class1A6,450@13.8%=890Class2contributions–selfemployedTheselfemployedpayNICsintwowaysFlatrate(£2.4perweek)Slide24Class4contributionTheselfemployedpayclass4NICs,basedontheleveloftheindividual’staxablebusinessprofits9%of‘profits’between£7,226and£42,4752%of‘profits’inexcessof£42,475ProfitsaredefinedastradeincomelesslossreliefNocontributionpayableiftaxpayerisolderthan65/(60)atthestartofthefiscalyearChapter6CapitalgainstaxAcapitalgainstax(CGT)isataxoncapitalgainsThemostcommoncapitalgainsarerealizedfromthesaleofstocks,bonds,preciousmetalsandproperty.Notallcountriesimplementacapitalgainstaxandmosthavedifferentratesoftaxationforindividualsandcorporations.CapitalgainsAcapitalgainisaprofitthatresultsfromadispositionofacapitalasset,suchasstock,bondorrealestate,wheretheamountrealizedonthedispositionexceedsthepurchaseprice.CapitalgainsThegainisthedifferencebetweenahighersellingpriceandalowerpurchaseprice.Conversely,acapitallossarisesiftheproceedsfromthesaleofacapitalassetarelessthanthepurchaseprice1.CGTinUK

ChargeablegainariseifthereisachargeabledisposalofachargeableassetbyachargeablepersonChargeablepersonsChargeabledisposalChargeableassetTaxedongainsarisingfromdisposalsinthecurrentfiscalyearSlide29CGTinUKExemptassetsMotorvehiclessuitableforprivateuseUKgovernmentstocksNationalsavingsandinvestmentscertificatesandpremiumbondsGilt-edgedsecurities(treasurystock)QualifyingcorporatebondsCertainchattelsComputingagainorlossBasiccalculation

£Disposalconsideration(proceeds)

XLess:

incidentalcostofdisposal (X)Less:

allowablecosts (X)Lessenhancementexpenditure (X)Gain/(loss) X/(X)ComputingagainorlossProceedsThedisposalconsideration(marketprice)IncidentalcostsofdisposalValuationfeesAdvertisingcostsLegalcostsAllowablecostsTheannualexemptionAnindividualisentitledtoanannualexemptionforeachtaxyearIndividualsreceiveanannualexemptionof£10,600(2011/12).TheannualexemptionisdeductedfromthechargeablegainsfortheyearafterthedeductionsoflossesandotherreliefsCapitallossesLossesaresetoffagainstgainsofthesameyearandanyexcesscarriedforwardCurrentyearlossesmustbeoffsetagainstcurrentyeargains.Theannualexemptionisthendeductedfromanyremaininggain.BroughtforwardlossesareonlysetofftoreducenetgainsdowntotheamountoftheannualexemptionCGTpayablebyindividualsIndividualsreceiveanannualexemptionof£10,600.Thecapitalgainstaxratesaredeterminedbythetaxablelevelofapersonsincome.Gainsaretaxedat18%iftheyfallintoanyremainingbasicratebandand28%wherethyexceedthisthreshold.Transfersbetweenspouses/civilpartnersSpousesandcivilpartnersaretaxedasseparateindividualsDisposalsbetweenspousesorcivilpartnersaremadeonanogainnolossbasis,anddonotgiverisetoachargeablegainorallowablelossTransfereetakesoverthetransferor’scostThedamage,lossordestructionofanassetIfanassetiscompletelydestroyed,thereisa‘full’disposalandcompensationmoniesarewhollychargedtoCGT.Ifthecompensationreceiptsarereinvestedinareplacementassetwithin12months,aformof‘rollover’reliefisavailable.The‘replacement’assetneednotbethesameastheoriginal.ItcanbeanyassetprovideditiswithinthechargetoCGT.ChattelsChattelsaretangiblemoveableproperty.WastingchattelsWastingchattelsareexemptNonwastingassetsExpectedlifeofnon-wastingchattelsfromdateofdisposal>50years.whenanon-wastingchattelissoldforlessthan£6000,anygainisexemptSlide38Rulesforcomputinggains/lossesonnon-wastingchattelsSlide39Originalcost£Grossproceeds£TreatmentTechnique(i)<6,000<6,000WhollyexemptNoneedtocalculateanygain(ii)<6,000>6,000Anygainrestrictedto5/3(Grossproceeds-£6,000)Calculategain,comparetothemaximum,takethelowerfigure(iii)>6,000<6,000Grossproceedsdeemedtobe£6,000Donormalcalculationbutalwaysuse£6,000asproceedsfigure(iv)>6,000>6,000NormaldisposalPrivateresidencesGeneralprinciplesAgainarisingonthesaleofanindividual’sonlyorprincipleprivateresidence(PPR)isexemptfromCGTFortheexemptiontobeavailablethetaxpayermusthaveoccupiedthepropertyasaresidenceratherthanjustastemporaryaccommodationPrivateresidencesThegainiswhollyexemptwhereth