Laws And Legal Concepts Relevant To Financial Advice Flashcards
What is a sole trader
Self employed
What tax is payable by a sole trader
Income tax and capital gains tax
NIC Class 2 and 4
Secondary Class 1 NIC for employees
What is a partnership
Largely the same as a sole trader but liability reflects share of business
What is an LLP
Partnership is a seperate legal person so the partners are not individually liable for debts of the LLP
What is a limited company
A seperate legal entity which is registered on the Register of Companies
What is the difference between a Plc. a Ltd.
Plc is publicly listed whereas ltd companies are privately owned
Who controls takeovers of Plcs
The takeover panel
What is enduring power of attorney and when was it introduced
Allows power of attorney to continue in the event of incapacity
When must enduring power of attorney have been established for it to qualify
Before October 2007 when the giver had full mental capacity
Does enduring power of attorney cover attitude to healthcare
No
Which act introduced lasting power of attorney
Mental capacity act 2005
What powers does lasting power of attorney give
Power to make decisions about health, welfare and property and financial affairs
What 5 things must there be for a binding contract
Offer Acceptance Intention Power to contract Consideration
In the case of a life insurance contract, what additional things must there be for a contract to be binding
Utmost good faith
Insurable interest
In a life insurance contract what constitutes N offer
The proposal
What constitutes acceptance in a life insurance contract
First premium payment
What is a joint tenancy
Equal shares and neither can sell without the others permission
What is a tenancy in common
Each holds separate shares and can dispose of the shares as they wish
What is the alternative to bankruptcy
Make an individual voluntary arrangement
Who is responsible for realising and distributing an estate in individual bankruptcy
Trustee
What order are debts paid in in bankruptcy
Costs of bankruptcy
Preferential debts
Ordinary unsecured creditors
How is appointed to deal with corporate insolvency
Liquidator
What are the alternatives to corporate insolvency
Administration or voluntary arrangements
What is needed to formally create a will
Writing, a signature and 2 witnesses (attestation)
How can you revoke a will
Write. New one,
Deliberately destroy it with intent to revoke
Get married
Divorce (revokes in part)
Who gets what if someone dies intestate with spouse and issue
Spouse gets personal chattels, £250,000 and half remaining balance. Children get other half on reaching 18 or marriage
What happens if someone dies intestate with no spouse
Everything goes to issue. If no issue goes to parents, siblings, grandparents hen aunts and uncles in that order
What happens if someone dies intestate with no relatives
Goes to the crown unless live in Lancaster or Cornwall in which case goes to the Duchy of Lancaster/Cornwall
What are the main uses of trusts
IHT planning
Pensions
What are the 3 certainties of. Trust
Words must be imperative
Subject must be certain
Objects, beneficiaries of trust must be certain
