Chapter 9: Taxation, Investment Wrappers and Trusts

Question 1

What rates of tax will be paid on a dividend by a higher rate taxpayer ?

Answer 1

33.75% after the £1000 allowance

Question 2

What assets are liable to CGT ?

Answer 2

Shares, Unit Trusts, Bonds ( some ), Property except primary residence

Question 3

When does a liability to CGT arise ?

Answer 3

Typically only paid when there is a disposal of goods

Question 4

What proportion of the annual ISA allowance can be invested into a cash isa?

Answer 4

20k allowance

Question 5

What happens to a JISA when the child turns 18?

Answer 5

It gets converted into an ISA. The child can withdraw the cash now. He will also have an allowance of £29k for that year.

Question 6

When can a child take over responsibility of their JISA?

Answer 6

18

Question 7

What is the key difference between a defined benefit pension scheme and a defined contribution pension scheme?

Answer 7

In a defined benefit pension scheme the employer is responsible for how well the fund does and makes up any shortfall to losses

Question 8

What is the type of trust in which a trustee holds assets for another person absolutely ?

Answer 8

A bare or absolute trust