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R03 - Chapter 1 > Chapter 10 > Flashcards

Chapter 10 Flashcards

1
Q

what tax wrappers are avliable

A

pension plans, isas, oiecs, life assurance

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2
Q

at what age is the limit to cotributing to the pensikon

A

75

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3
Q

employees/se;f employed can contribute up to

A

100,000

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4
Q

what is the life time allowance

A

1,073,100 - any excess takes charges

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5
Q

what is a crystalatisation

A

test against the lta

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6
Q

how much can you take lta

A

25% tax free - other income taken down from lta will be taken as income tax

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7
Q

how is a crystalised beneifittaxed

A

tacabkle - cklassied as non savigs income - cant use any allowances against pension incoem irrepective of how yu take it

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8
Q

what is death classed as

A

crystalised event

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9
Q

if a pension is drawing out 32,000 for first time what is the rate

A

32,000 x o.25 = tax free
32,000x0.75 will be taxed
24,000 = 75% - which will be taxed at 40% = 9,600

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10
Q

what is the cash isa accesability

A

from 16

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11
Q

are isas instat access

A

yes

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12
Q

What is the main benefit of using a tax wrapper?

A

Beneficial tax treatment

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13
Q

what is the stocks and shares isa

A

underlying asset - under a Unit end Trust

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14
Q

what uis a innoative isa

A

treated as a atsocks and shares isa - but avaliable from 18

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15
Q

is a lifetime isa part of the 20,000 annual limit

A

yes

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16
Q

when is the last age you can have one lisa

A

18-40

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17
Q

help to buy isa

A

you can still top u to it if yoy had it before november 2019 - maxium scubscripton of 12,000 and a it was a contract - used for first home

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18
Q

How many years cxan you carry forward a pension

A

3 years plus teh current tax year

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19
Q

what is the retirement date where you can claim beneifits to your pension

A

55

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20
Q

can a employers pensions still be apid whuilst working

A

yes

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21
Q

what are structured products usually linked to

A

the FTSE 100

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22
Q

are income and gains exept from tax in an isa

A

yes

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23
Q

what ar ethe limitids of an isa

A

20,000

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24
Q

what is teh eligibility fr an isa

A

must be a uk residnet - 18 - not held jintly

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25
Q

what if icnoem is reieved by a jisa - what haopens

A

anything more than a 100 gross is net as taxed as parents income

26
Q

what types of isas are tehre

A

junior, lifetime, innoative, stcoks and shares, cash

27
Q

what can stocks and shares invest in

A

they may invest in oeics, Uk UCITs, aim listed, sec urity shares, coporate bonds - cash - lief assurance policeies - shares listed on recofnised platfiorms

28
Q

what is a cash isa invetsed in

A

banks or buidling societies

29
Q

what investment opportunties does a jisa have

A

same as a normal isa

30
Q

what is an innoative isa

A
  • peer ro peer lending, sharia compliant
    connecting lenders with borrowers
31
Q

what replaced teh helped to buy isa

A

the LISA

32
Q

when cant you open a LISA

A

when youre 40 or odler

33
Q

what happens when a spouse dies and they have an isa

A

the isa is inhertied by the oteh rspouse, they can conntribute without it going into tehir allowances

34
Q

who are isas suitabkle for

A

those who have used up their allowances or an ADR

35
Q

when was a CTF abolished

A

2011 - replaced by the JISA

36
Q

what is the tax treatment of inceom on an isa

A

receieved free of inocem and cgt - more than £ 100 charged to the parent if held in a Jisa

37
Q

what do OEICS and Unit trusts allow

A

they allow individuals to particpaite in a large portfolio of shaes

38
Q

how can a uk colletcive be bought in

A

can be held in tax wrappers such as pensions and isas

39
Q

what are the differnces between how Uk collectives are taxed and direct investments

A

unit trusts and OEICs are openended.
Units or shares are issued when investors invest
and liquidated

taxation of dividends from OEICs and equity uni

40
Q

where are offshiore collectives et up

A

with there is little to no tax - channel islands 0 luxembirg

41
Q

who would be suitabkle for offshore collectives

A

non uk residents

42
Q

how are reporting funs taxed

A

declares as income on self assesmnet - they must be applied to HMRC

43
Q

how are equity distributions taxed

A

as dividend rates

44
Q

how are interest distributiosn taxed

A

as savings - from 0% 20 40 45

45
Q

is there a personao allowance on interest distrinutions

A

yes

46
Q

ultimatley how are they taxed - reporting funds

A

taxed the same as uk collectices

47
Q

what about a non reportiung fund do they have stauts

A

no - the do not have reporting status

48
Q

how are non reporting funds taxed

A

Income is not taxed as it arises, only on
disposal of units/shares

basiclaly when they are sold

49
Q

what happens if one dies and they hold an non reporting fund

A

calcualted off cgt principles

50
Q

as non reporting funds have income within it how is this taxed

A

will constitute towards part of the gain

51
Q

as it is opart of the gain what is the rate liable to

A

to income tax it is charged
at the 20% basic rate, the 40% higher rate or the
45% additional rate.

52
Q

what is the differences between non reporting funds and reporting funds

A

non reporting funds have some advantages

53
Q

what are the advantages iwth on reporting funds

A

Income can grow faster in a low-tax environment.

UK investors can defer paying tax on income and profits made offshore until they bring them back to the UK.

Offshore investments are exempt from UK inheritance tax (IHT) for non-UK domiciled investors.

54
Q

what is teh tax treatment of an offshore fund

A

dividends
it receives will usually be subject to a non-reclaimable
withholding tax
Fixed-interest funds are usually more tax efficient for
UK-resident investors because these funds choose
investments, such as Eurobonds and exempt gilts, which
pay income gross.
* Some jurisdictions levy a small amount of tax on
offshore funds.
.

55
Q

regarding lifetime assurance policies how is the icnome taxed

A

well - thye do not produce income so wont be taxed, however, if it is in a trust drawdown then yes

56
Q

if a chargabel event occurs what is it declared as

A

a chargabele gain

57
Q

if a policy is subject to a trust who is taxed

A

teh settlor

58
Q

what if the settlor dies who pays the taz

A

the trustee

59
Q

what is the taxation on a discretionary

A

45%

60
Q
A

R03 - Chapter 1 (13 decks)

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