1. The Green Budget presented on November 25, 1997 contained proposals for reform of which of the following taxes?
a: Income tax
b: Capital gains tax
c: Inheritance tax
d: Corporation tax
2. The Government proposes to introduce a new Individual Savings Account to replace Tessas and Peps. Which of the following statements is/are true?
a: It will be possible to transfer existing Peps into the ISA subject to the overal maximum of £50,000 in value
b: Up to £5,000 a year per person can be invested in an ISA whether the contribution is in cash or in other form
c: A maximum of £1,000 can be invested in cash into an ISA each year subject to a total limit of £50,000
d: It will not be possible to include life insurance within an ISA
3. Under the proposals for the ISA, when will existing Peps lose their tax-free status?
a: April 1, 1996
b: April 6, 1996
c: October 6, 1996
d: December 31, 1996
4. Which of the following statements is/are true in connection with existing Tessa accounts and the proposed ISA rules?
a: To preserve tax-free status, existing Tessas will have to be closed and transferred into an ISA by April 6, 1996
b: Existing Tessas will have to be closed and transferred into an ISA by October 6, 1999 in order to preserve tax-free status
c: Tessas in existence before the introduction of ISAs will be able to run their full original term within the current rules
d: Following the transfer of a Tessa into an ISA, there will be no limit on how long the investment must be kept to be tax-free
5. Which of the following investments will be acceptable under the proposed ISA rules?
b: Stock and shares
c: Life insurance policies
d: National Savings
e: Shares quoted on the AIM
Answers: 1 – d; 2 – a, c; 3 – c; 4 – c, d; 5 – a, b, c, d.