To help you to keep up with the fundamentals of tax, retirement and financial planning, try answering these questions.
Maggie and Peter want to send their two children to private boarding schools when they are eight years old. Which of the following aspects of their circumstances is most inconsistent with this aim?
A) They have an interest-only mortgage and have not made a will.
B) They have life assurance policies on a joint life first death basis for a total of £100,000 sums assured. They have invested in Isas/Nisas for the past three years from capital Maggie inherited.
C) Their joint income is about £45,000 and their available financial capital is about £30,000. Both sets of grandparents have died.
D) Both Maggie and Peter are in good health. Maggie is domiciled in New Zealand and has been resident in the UK for the past eight years.
Sally wants to set up an offshore discretionary trust for her grandchildren, aged four and two. She wants to settle £30,000 in quoted company shares she already owns. What are the main drawbacks of this strategy?
A) The stamp duty on the transfer of the shares into the trust.
B) The CGT on the transfer of the shares into the trust.
C) The cost of administering the trust in relation to the potential benefits.
D) The potential IHT periodic and exit charges on the trust assets.
Edward is a sole trader and may pass on his business to his son but he is unsure whether to transfer some assets or the whole business. Advise him on the implications for entrepreneurs’ relief.
A) He can transfer either some assets or the whole business in order to qualify for entrepreneurs’ relief.
B) He needs to transfer part or all of the business, which is capable of continuing operation, to qualify.
C) He should transfer only the assets of the business in order to qualify.
D) Entrepreneurs’ relief is only available for shares in a personal company.
Questions supplied by CPD Centre. Answers at: www.moneymarketing.co.uk/technical
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