Topic 9 - Tax Wrappers

Question 1

What is a tax wrapper

Answer 1

A tax shelter around an investment that changed the way it’s taxed

Question 2

Types of ISA

Answer 2

• Stocks and shares ISA
• Cash ISA
• Innovative finance ISA
• HTB
• LISA

All have subscription limits to meet tax benefit

Question 3

Child trust fund

Answer 3

Tax free savings account on behalf of children.

Initial payment from government.

No access to funds until child is 18

Question 4

Junior ISA

Answer 4

Introduced after CTF stopped. Same rules apply apart from government initial payment

Question 5

Venture capital trusts and enterprise investment schemes

Answer 5

These are schemes provided by government to incentivise investment with tax relief.

To encourage private investors to provide funds to new companies not listed on stock exchange

Question 6

Difference in VCT and EIS

Answer 6

VCT is a normal investment runs like a fund with investment manager

EIS is a system of tax reliefs that company applies for. If eligible the investor can also claim tax relief

Question 7

SIES

Answer 7

Seed enterprise investment scheme. Offers even higher tax relief than EIS. aimed at smaller companies (startups)