Taxation in the united kingdom

Taxation in the United Kingdom may involve payments at least two different levels of government: local government and central government. Local government is financed by grants from central government funds, business rates and council tax. Central government revenues are mainly income tax, national insurance contributions, value added tax, excise duties, corporation tax, capital gains tax, inheritance tax and stamp duty.

All UK derived income and gains are subject to UK taxation no matter the citizenship neither the place of residence of the individual nor the place of registration of the company.

Individuals who are both resident and domiciled in the UK are additionally liable to taxation on their worldwide income and gains. For certain individuals, therefore, the UK is a tax haven: being resident but not domiciled in the UK means that only income remitted to the UK is taxed, together with all capital gains.

A company is resident in the UK if it is UK-incorporated or if its central management and control of a company are in the UK. A company is domiciled in the UK if it is incorporated in the UK. A company’s domicile has no effect on its tax position – it pays tax on its worldwide income and gains.

Income tax forms the bulk of revenues collected by the government. Depending on an individual’s income, the rate of income tax ranges from 10% (starting rate) to 20% (basic rate for interest), to 22% (basic rate), to 32.5% (higher rate for UK dividends), to 40% (higher rate).

The second largest source of government revenues is national insurance contributions, payable by employees, employers and self-employed.

The third largest source of government revenues is value added tax, charged at the standard rate of 17.5% on supplies of goods and services. Certain goods and services are exempt from VAT, and others are subject to VAT at lower rate of 5% (the lower rate) or 0% (‘zero-rated’).

The fourth largest source of government revenues is corporation tax, charged on the profits and capital gains of companies. The highest rate is 30%, but lower rates apply to companies with levels of profits below 1.5 million pounds.

Capital gains are subject to tax at the marginal rate of income tax (for individuals) or of corporation tax (for companies).

Excise duties are charged on, amongst other things, fuel, alcohol, tobacco, betting and vehicles.

Stamp duty is charged on the transfer of certain partnership interests at rates of up to 4%, and shares and certain securities at a rate of 0.5%. Modernized versions of stamp duty, stamp duty land tax and stamp duty reserve tax, are charged respectively on the transfer of real estate and shares and securities, at rates of up to 4% and 0.5%.

Inheritance tax is levied on certain gifts and the estates of deceased persons at a rate of 40%. Any inheritance tax must be paid by the administrators of estate before probate is granted.

Vocabulary

	Business rates (n)	Налог на предпринимателя
	council tax	муниципальный налог (взимается с домовладельцев или арендаторов дома, квартиры и т.п.)
	capital gains tax	Налог на реализованный прирост капитала
	to derive	получать, извлекать (from)
	gains	доходы
	citizenship	гражданство
	dual citizenship	двойное гражданство
	to acquire citizenship/ to receive citizenship	получать гражданство
	to grant citizenship	предоставить гражданство
	to revoke smb’s citizenship	лишать кого-либо гражданства
	place of residence	местожительство
	resident (n)	житель; постоянно проживающее лицо
	to domicile	поселиться на постоянное жительство; сделать основным местопребыванием
	tax haven	Налоговая гавань
	to remit to smth./smb	иметь отношение, относиться; касаться чего-л., кого-л.
	to incorporate	регистрировать, оформить (общество и т.п.)
	domicile (n)	юридический адрес; постоянное местожительство
	bulk (n)	величина, объем
	self-employed	предприниматель без образования юридического лица
	supply of goods	предложение товара
	to apply to smth.	применять, использовать
	marginal rate of tax	предельная налоговая ставка
	transfer (n)	перевод, перечисление (денежных сумм)
	interest in partnership	доля в капиталах товарищества
	securities (n.,pl.)	ценные бумаги
	respectively (adv.)	соответственно
	real estate	недвижимое имущество
	deceased person	умершее лицо
	probate (n)	официальное утверждение завещания судом
	probate (n)	официальное утверждение завещания судом
	to grant	предоставлять