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Platforms, Wealth Management and Service Providers > Chapter 2: Platform Wrappers > Flashcards

Chapter 2: Platform Wrappers Flashcards

1
Q

What is a GIA?

A

General investment account

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2
Q

What tax is an ISA exempt from?

A

Income tax and capital gains tax (CGT)

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3
Q

Who is a help- to- buy ISA offered by?

A

Banks/building societies with a 25% government bonus available for savers who use the product to help purchase a home.

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4
Q

What is Innovative Finance ISA based on?

A

Peer to peer lending propositions.

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5
Q

HMRC guidance to ISA managers states that investors must apply for an ISA (either in writing or not on writing). In the application they must provide:

A
  • The first tax year during which they are applying for the ISA
  • The investors full name, permanent address, national insurance number and DOB.
    -Type of ISA they wish to open
  • A declaration that the info given is correct and this is the only ISA of this type they have applied to this year.
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6
Q

What are the key reports from an ISA manager to HMRC.

A
  • ISA 10 and ISA 14
  • ISAComm100
  • ISA14a (Stats)
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7
Q

What is an ISA10 and ISA14?

A

Annual return and claim for previous tax year

These enable the ISA manager to claim back from HMRC any tax suffered on Income/interest received for ISA holders during the tax year.

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8
Q

When is an ISA10 and ISA14 report required?

A

ISA14 is an annual claim due on the 5th Oct while ISA10 is an optional interim claim.

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9
Q

What is an ISAComm100 also known as?

A

Annual Return of Information

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10
Q

What is an ISAComm100 used for?

A

This reports provides HMRC with a full list of the ISA wrappers held for each ISA holder (information that HMRC. An use to ensure that any abuse of ISA limits is identified).

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11
Q

What is an ISA14a(Stats) used for?

A

This given overall data( rather than investor level data) of ISA activity to enable HMRC to perform statistical analysis of the ISA market.

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12
Q

What information does a ISA14a(Stats) include?

A

Both subscriptions and investment market values

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13
Q

What information does an ISAComm100 require?

A

• Account number
• Investor name, address, DOB, and NINO
• Amounts subscribes
• Date of first subscription
• Amounts transferred in

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14
Q

What is an APSS106?

A

Tax reclaim form

Manager to reclaim 20% must submit this form annually - no alter than 6th October

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15
Q

A holder of a SIPP can make withdrawals any time after the age of?

A

55

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16
Q

For on onshore investment bond, what percentage is applied to withdraw without incurring a tax charge?

A

5%

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17
Q

What range of assets are not included in a SIPP?

A

• residential property
• exotic assets
- vintage cars
- wine
- coins
- stamps
- works of art

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18
Q

Up to what limit can contributions be paid into a SIPP by standard and higher rate tax payers without incurring an income tax liability on the contributions?

A

£60,000

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19
Q

What are typical wrapper types:

A

• GIA
• Stock & Shares ISA
• Cash ISA
• JISA
• Lifetime Isa
• offshore bond
• onshore bond
• SIPP
• insured personal pension
• S32 buyout bond

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20
Q

What are the only three wrappers that can be held in joint names:

A

• GIA
• offshore bond
• onshore bond

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21
Q

Up to what annual limit can contributions be paid into a SIPP by standard or higher rate taxpayers without incurring an income tax liability on the contributions?

A

£60,000

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22
Q

What is a crystallisation event?

A

• When a member took a pension or lump sum
• reached age 75
• died
• or transferred their pension overseas

23
Q

How old do you have to be to open a lifetime ISA

A

18-40

24
Q

Section 32 of the Finance Act 1981 attempted to give flexibility to pension arrangements in light of what underlying change?

A

Employers closing or changing their defined benefit scheme

25
Q

What type of assets are not subject to a tax charge when held in a SIPP?

A

• stock & shares listed on a recognised exchange
• unauthorised unit trusts
• carbon credits
• commercial property
• gold bullion
• investment trusts subject to FCA reg
• unlisted shares
• futures, options traded on a recognise exchange and CFDs

26
Q

Where the ISA application is not made in writing what must occur?

A

ISA manager must still ensure the declaration is made and evidenced. This will be emailed/fax/posted to the applicant.

27
Q

What is a gross roll up?

A

Is a feature of offshore investment bonds that allows the investment gains to accumulate without being subject to immediate income or CGT tax.

Essentially the investment grows in a virtually tax free environment until the investor decides to withdraw the funds.

28
Q

What is the main tax benefit of investing in an offshore bond?

A

Gross roll up and top slicing relief

29
Q

In what cases is an ISA not eligible for repair: the investor

A

• did not satisfy the residence condition at the time the subscriptions were made or
• was underage at the time the subscriptions were made

30
Q

What happens to investments in a reparable ISA?

A

They lose their tax exemption from the date of the first invalid subscription up to the date of repair.

31
Q

if you have multiple LISAs does the annual contribution allowance apply for all or just one of them.

A

It’s not like a stock & shares ISA, you can contribute to each individually.

32
Q

What year were ISAs introduced?

A

1999

33
Q

How old must you be to open a cash ISA and how old must you be for a stock & shares ISA?

A

16 for cash and 18 for stock & shares

34
Q

When was a lifetime ISA launched and why?

A

2017 and two purposes: support those saving to purchase first home or save for retirement

35
Q

Up to what age can you make subscriptions for a LISA?

A

50

36
Q

When was the JISA introduced?

A

2011

37
Q

ISA rules have been amended to allow the surviving spouse what?

A

An additional permit Subscription (APS) equal to the deceased spouses ISA.

38
Q

How long are APS subscriptions for spouses usually allowable?

A

Three years after date of death or 180 days after the administration or the death estate is complete

39
Q

What do some providers allow the surviving spouse to do?

A

Instruct that the assets held in the deceased persons account are simply transferred into an ISA in their own name, removing the need to sell and purchase them again.

40
Q

For securities issued by companies to be eligible and recognised under ISA rules as qualifying investments, what are the requirements? At least one of the following:

A

• securities or shares in issuing company are officially listed on a recognised stock exchange
• the issuer is at least 75% owned by a company who’s shares are also traded/listed

41
Q

A withdrawal from an LISA may be applicable to what charge? Unless

A

25% unless the withdrawal charge is applied where money is used to buy a residential property, or investor is 60 and over or investor has a terminal illness.

42
Q

What is an investment bond and is it an investment wrapper?

A

Yes.
A single premium life insurance policy that has a small element of life
insurance that is paid out after the insured person’s death.

43
Q

What are the two types of investment bonds?

A

Onshore and offshore

44
Q

What is the difference between and on and offshore bond

A

With an offshore bond, you have gross roll up and therefore it grows faster whereas with an onshore bond corporation tax is payable.

45
Q

Annual allowance contributed for a pension scheme is?

A

£60,000 contributed from any source whether employer or holder.

46
Q

What are individuals earning more than £260,000 subject to in a pension fund?

A

Tampering adjustment and is subject to four separate values of income and savings.

47
Q

If an investor is aged 55 and over and has already begun taking benefits from pension savings, what is their annual allowance reduced to?

A

£10,000

48
Q

Section 32 of the buyout policies attempts to what?

A

Give flexibility over pension arrangements

49
Q

Extra question: Who supervises an OEICs management and who supervises a Unit Trust ?

A

For OEIC is a depository and for unit trust is a trustee

50
Q

As part of a package an investor has a zero coupon bond combined with call options. This would best describe what?

A

Structured product

51
Q

What is a capital guaranteed product a combination of? Structured

A

Zero coupon bond and derivative

52
Q

Does a investment bond pay income to holders?

A

No

53
Q

Annual allowance for investment bonds both offshore and onshore and personal pensions?

A

No limit for investment bonds

Pension £60,000

Platforms, Wealth Management and Service Providers (8 decks)

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