Tax Wrappers

Question 1

Eligibility rules for ISAs?

Answer 1

Investing in Stocks and shares or innovative finance ISA - 18 years.

Cash ISA - 16 years or over

Can only be held in single name, no joint accounts

Question 2

Stella, aged 24, has invested £4000 into a lifetime ISA (LISA) in 2020/21. How much if anything can she invest into other ISA’s in the current tax year?

Answer 2

£16,000

She has the remainder of her annual limit.

Question 3

Inwhat circumstances is an additional permitted subscription (APS) over and above the usual investment limit, allowed in respect of an ISA?

Answer 3

An APS is allowed for someone who has died. The spouse/civil partner of the deceased is able to make an additional ISA contribution to the value of the ISA holdings of the deceased.

Question 4

Followimg someone’s death the right to make an APS lasts for a period of up to:

A). 6 months

B). 12 months

C). 2 years

D). 3 years

Answer 4

D) 3 years

The right to make an APS lasts 3 years from date of death.

For stocks and shares the limit is 180 days after administration of the estate is complete.

Question 5

The advantage of holding investments in a stocks and shares ISA, rather than holding collective investments directly, is that the investment is free of what taxes?

Answer 5

Investments held within an ISA are free from income tax and Capital gains tax.

Question 6

Existing help to buy ISA customers can continue saving up to £200 per month until:

A) 30 November 2021

B) 30 November 2024

C) 30 November 2026

D) 30 November 2029

Answer 6

D) 30 November 2029

Customers who owned a a help to buy ISA before 30 November 2019 can save a maximum if £200 per minth until 30 November 2029

Question 7

What is the purpose of the lifetime ISA?

Answer 7

The lifetime ISA is to encourage people to save for the purchase of their first home and/or for retirement.

Question 8

An investor can increase their annual ISA investment limit by taking out a life time ISA, a help to buy ISA and a standard ISA. True or false?

Answer 8

False, the help to buy and lifetime ISA are part of annual allowance not in addition to it.

Question 9

Aaron, aged 12, has a stakholder child trust fund. What is the maximum annual management charge that can be applied to the fund?

A) 0.75 percent

B) 0.5 percent

C) 1 percent

D) 1.5 percent

Answer 9

D) 1.5 percent

Question 10

Which form of investment normally represents a higher risk: an investment trust or a venture capital trust?

Answer 10

venture capital trust as these are new companies and represent a higher risk.