Long stuff to remember from UNIT 1

Question 1

What are the different investment structures offered for endowment policies and whole of life assurance policies?

Answer 1

Non-profit
With Profit
Unit Linked
Unitised With Profits
Low- cost

Question 2

There is a wide range of whole-of-life policies that are distinguished by the way the underlying investment is structured, the investment base, and the features they offer

Answer 2

1) Non-profit
2) With Profit
3) Unit Linked
4) Unitised With Profits
5) Low-cost
6) Flexible
7) Universal

Question 3

Under the terms of a traditional split-capital investment trust, what minimum percentage, if any, of the income generated by the portfolio is allocated to the income shares?

Answer 3

100%

Read questions carefully; this is not asking if there is a minimum percentage about how many income shares there should be, its asking for any given income share that the investor has( remember split capital investment trusts can offer different types ) how much income is given to the income share. 100% as there are not deductions etc

Question 4

When contributing to a personal pension, what tax relief, if any, is given at source?

Answer 4

Relief equivalent to the basic rate of tax

Question 5

Which of the following items are exempt from Value Added Tax (VAT)?

Accountant’s fees.
Heating costs.
Insurance premiums.
Legal costs.

Answer 5

Insurance premiums

Domestic Heating is charged at a lower rate of VAT but still subject to VAT

Question 6

A limited liability partnership will pay which type of tax on their profits?

Capital gains tax.
Income tax.
Corporation tax.
VAT.

Answer 6

Income tax