TOPIC 9 - Tax wrappers Flashcards
With an Enterprise Investment Scheme (EIS), which of the following are true?
a) Tax relief is available at the investor’s marginal rate.
b) Tax relief is available on up to £1m investment per tax year.
c) Gains are exempt from capital gains tax if shares are held for five years.
d) Investment is made through a collective investment scheme.
b) Tax relief is available on up to £1m investment per tax year.
Which of the following is untrue regarding ISAs?
a) Subject to the annual contribution limit, it is possible to invest in different ISAs in the same year.
b) It is not possible to have a joint ISA.
c) Shares from an all‑employee savings‑related share option scheme can be held in an ISA.
d) The minimum age for a cash ISA is 18.
d) The minimum age for a cash ISA is 18.
Jamal is contributing to a Help-to-Buy ISA and is now thinking of starting a Lifetime ISA. Which of the following is true?
a) He can invest in both types of ISA but cannot claim any government bonus.
b) He can invest in both types of ISA and receive the government bonus from one of them.
c) He can invest in both types of ISA and receive the government bonus for both.
d)
He cannot invest in both types of ISA.
b) He can invest in both types of ISA and receive the government bonus from one of them.
Which of the following cannot be held in a stocks and shares ISA?
a) UK investment trusts.
b) UK open ended investment companies.
c) Residential property.
d) Gilts.
c) Residential property.
When Adrian died, he had £140,000 invested in a stocks and shares ISA. What is the position with the ISA?
a) Adrian’s executor can make a further investment in the ISA on Adrian’s behalf to top up the current year’s subscription.
b) Adrian’s ISA must cease and the proceeds become part of his estate.
c) Adrian’s spouse or civil partner can make an additional subscription of up to £140,000.
d) The ISA trustees have discretion about how to distribute the fund.
c) Adrian’s spouse or civil partner can make an additional subscription of up to £140,000.
Mansour has a flexible cash ISA, having invested £15,000 of the £20,000 annual limit in July. The following December he withdrew £8,000 in an emergency to replace his car. How much, if anything, could Mansour invest in the ISA before the end of the tax year?
a) He cannot make a further investment in the tax year.
b) £5,000.
c) £8,000.
d) £13,000.
d) £13,000.
Sashin wishes to invest into a venture capital trust (VCT). Which one of the following statements is false?
a) Income tax relief is available at 30%.
b) The maximum investment for tax relief is £500,000.
c) VCT gains are exempt from capital gains tax.
d) VCT dividends are tax free.
b) The maximum investment for tax relief is £500,000.
Aisling, aged 32, has a Lifetime ISA fund worth £3,600, having invested £3,000. She is now in some financial difficulties and needs to withdraw the funds. How much would Aisling receive if she did cash in the fund?
a) £2,250.
b) £2,700.
c) £3,000.
d) £3,600.
b) £2,700.
There is a 25% penalty applied if funds are withdrawn for reasons other than the purchase of a first home, the holder reaching age 60 or the holder suffering a terminal illness. £3,600 x 25% = £900. £3,600 - £900 = £2,700.
Janine is 35 and has a Help-to-Buy ISA. She is now about to buy her first property. In total she has been informed that her ISA will provide £3,600 towards the purchase. This means her current fund, without including the government bonus, is worth:
a) £2,400.
b) £2,880.
c) £3,000.
d) £4,000, because she will not qualify for a bonus due to her age.
b) £2,880.
At what minimum age can funds be taken from a Child Trust Fund?
a) At any age.
b) 16.
c) 18.
d) 21.
c) 18.
Stella, aged 24, has invested £4,000 per year into a cash ISA
for the past 3 years. In the current tax year, she received an
inheritance and invested the full subscription limit into her
cash ISA, but now she would like to split the money between
her cash ISA and a stocks and shares ISA. Is she able to do this
in the current tax year?
Yes
In what circumstances is an additional permitted subscription
(APS), over and above the usual investment limit, allowed in
respect of an ISA?
Upon death.
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.
Following someone’s death, the right to make a cash additional
permitted subscription (APS) lasts for the later of 180 days or
what length of time from the date of death?
a) 6 months.
b) 12 months.
c) 2 years.
d) 3 years.
d) 3 years
In the current tax year, Jane invested £10,000 into a stocks and
shares ISA that does not offer a flexible investment facility.
Later in the current tax year, she withdrew £1,760. Given an
annual ISA investment limit of £20,000, how much would Jane
be able to pay into ISAs during the remainder of the current
tax year?
a) £10,000.
b) £12,240.
c) Nil.
d) £20,000
a) £10,000.
The advantage of holding investments in a stocks and shares
ISA, rather than holding collective investments directly, is that
the ISA investment is free of what taxes?
Income and capital gains
