Question

Discuss the basic principles of income taxes and determine your filing status.Develop a detail plan that will enable you to protect your credit and manager your debts.

Answer 1

This Answer Note explains what profits relating to real property (ie real estate and land) are required to be brought into a UK income tax calculation under the heading for property income. It explains the principles for making the calculations; the meaning of a UK and overseas property business, including the meaning of generating income from land; the specific items that must be included and excluded from that calculation; and the territorial scope of the UK income tax charge on property income.This Answer Note explains the income tax rules that apply when an individual subject to UK income tax receives a dividend or other distribution from a company on or after 6 April 2016. It looks at tax on dividends and other distributions from both UK and non-UK resident companies, explains the dividend allowance and includes the rates of tax.This Answer Note explains how savings income is taxed on UK resident and domiciled individuals. It discusses gross interest, net interest, tax rates, including the starting rate for savings and the savings nil rate band (also known as the personal savings allowance) and the treatment of relevant foreign income. It also comments on the accrued income scheme and the potential difficulties for UK taxation caused by devolution.This Practice Note sets out the basic principles of UK income tax, including the applicable legislation, who has to pay it, what income tax rates apply, what income tax is paid on, including basis periods, and when a person has to pay income tax to HMRC. It also summarises the current status of the devolution of income tax to Scotland and Wales.

PLAN TO PROTECT/AVOID DEBTS/CREDITS

(1)Pay at least the minimum on each debt:-

Each monyh,pay offs as much of your debt as you can.At least pay the minimum you owe on each loan.This will protect your credit rating.If you can afford to pay more,pay down the loan with the highest interest rate first.As you pay off each loan, start paying more on the next debt in line.

(2)Ask for a lower interest rate:-

Ask your lender for a lower rate. If the first person you talk to can't help you,ask to speak to their supervisor.If you have a good record of paying on time, they may be willing to reduce your interest rate to keep your business.

(3)Stop using your credits cards:-

You can't have to cancel your credit cards or cut them up.But put them away somewhere safe and don't use them to make any more purchases until you have cleared your debts.

(4)Consider a consolideration Loan:-

You may be able to reduce your interest by grouping all your debts into 1 low-interest loan.This works best if you stop accumuluting debt while you pay off the consideration loan.Two common options are a home- equity loan or line of credit.The interest rate will be lower, but keep in mind that you could lose your house if don't make the payments. Find out how long it could take to pay off your credit cards and other debt with this debt calculator.

(5) Trime your budget:-

Could you cut back on things like eating out and other optional purchase? Trimming your buget will free up more money to pay down on your debt.

(6)Talk to a professional:-

If you can't figure out a way to reduce your debt, consider talking to a financial planner or credit counsellor.Non-profit credit agencies help people work through their debt problems.They can help you develop a plan, reduce your interests costs and get out of debt over time.