Topic 6

Question 1

Name 3 Tax free NS&I investments

Answer 1

• Direct ISA
• Junior ISA
• Premium Bonds

Question 2

Name 5 taxable NS&I investments

Answer 2

• Direct Saver
• Income Bonds
• Green Savings Bonds
• Guaranteed Income Bonds
• Guaranteed Growth Bonds

Question 3

What are the 4 main asset classes

Answer 3

• Cash
• Property (Buy to Let)
• Fixed Interest Securities
• Equities

Question 4

What risks are associated with offshore accounts?

Answer 4

• the currency may not be sterling and therefore could be adversely impacted by exchange rates
• investors may not be protected

Question 5

Debt Management Office Gilt Categories

Answer 5

Short-dated - less than 7 years
Medium-dated - 7 - 15 years

Question 6

Financial Press Gilt Categories

Answer 6

Shorts - less than 5 years
Mediums - 5-15 years
Longs - 15 + years

Question 7

True or false

Capital gains tax is due on any gains made from the sale or redemption of gilts.

Answer 7

False

Any gain is entirely free if CGT

Question 8

True or false

Interest on gilts is classed as savings income and is therefore subject to income tax

Answer 8

True

Question 9

What is a Debenture?

Answer 9

A corporate bond that is secured against the company’s assets

Question 10

What are the key facts on Local Authority Bonds?

Answer 10

• secured on local authority assets
• offer guaranteed rate of interest paid half- yearly
• non negotiable
• fixed return at maturity
• not guaranteed by the government