Unit 1 Flashcards
How does a Mutual organisation differ from a Proprietary one?
MUTUAL ORGANISATIONS HAVE NO SHAREHOLDERS BUT ARE OWNED BY THEIR MEMBERS
Who issues UK Banknotes?
THE BANK OF ENGLAND
What are the 4 main elements of Financial Intermediation as practised by Banks and Building Societies?
- GEOGRAPHIC LOCATION
- AGGREGATION
- MATURITY TRANSFORMATIONS
- RISK TRANSFORMATION
What is the effect of European Union Directives on UK law?
The objectives of the directive must be implemented in each state. Within a specified timescale, typically 2 years. The choice of how they are implemented if left to national authorities of each state
Which of the following are not subject to Income Tax?
A) Income from a Trust
B) A waiter’s tip
C) Educational Scholarships
C) Educational Scholarships
What classes of National Insurance contributions are paid by self-employed persons?
2 & 4
What rate of IHT is payable immediately on chargeable lifetime transfers?
20%
How much stamp duty land tax is payable by a woman who sells her house for £400,000?
None - Stamp land tax is paid by purchaser
It is possible to influence a nations level of economic activity by manipulating the amount of tax revenue and the amount of spending by the government, local authorities and public bodies. What is the name of this Economic Policy?
Fiscal Policy
What is the maximum term for which Maternity Allowance can be paid?
39 weeks
What is the minimum period per week that must be spent as a carer before Carer’s allowance can be claimed?
35 hours
Karen was born in the U.S. while her English Mother was working there on a 2 year assignment. Her father was American but never married her mother and she returned to England with her mother. What is Karen’s Domicile?
UK domicile as parents were not married and Mother’s Domiciles is UK
To what extent can deposit accounts said to be
“Secure”?
Apart from the risk of a Bank or Building Society failing, the capital is secure
What rate of tax is normally deducted at source from
Building Society accounts?
20%
Give two reasons why Offshore Investments may be more risky than similar on-shore ones
- Subject to currency fluctuations
- Local regulatory regime may not be as strong as the FCA in the UK
What is the minimum age at which a person can take out a National Savings and Investments Direct Saver?
16
What is the difference between the taxation of interest on government stocks and of that on local authorities?
Interest on GS is paid gross (but is taxable) LA stocks are paid net of 20% tax
What does the Price/Earnings (P/E) ratio of a share
indicate?
Relates the share price to the earnings (net profits) per share. Profits are not always distributed as Dividends
How can a company raise additional finance for expansion without borrowing?
By a Rights Issue of new shares to existing Shareholders
What is the normal distinction between Debentures and other loan stocks?
Debentures are normally secured on company assets
What change of attitude by lenders led to the establishment of the Buy-to-Let market?
Lenders saw Buy-to-Let business as residential rather than commercial = Different underwriting principles = lower interest rates
What type of tenancy agreement would normally be used for a Buy-to-Let property?
Assured Short-hold tenancy
What are the main advantages of an Investor of collective Investments?
- Skilled investment manager
- Reduction of risk by spreading fund
- Reduced dealing cost
- Wide choice of investment funds
Who owns and controls a unit trust fund’s assets?
The trustees