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The Technical Quiz: 12 June

To help you to keep up with the fundamentals of tax, retirement and financial planning, try answering these questions

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Question one

William has taxable income for 2014/15 of £36,865. During the year he makes a donation to a registered charity by sending it a cheque for £1,600 and signing the gift aid certificate. How much higher-rate tax does William pay for 2013/2014?

A) £2,000

B) £1,200

C) £1,000

D) Nil

Question two

Henry has an income of £104,000 for 2014/15. Why would a personal pension contribution of £4,000 will be beneficial for him?

A) It will enable further income to be taxed at 20 per cent

B) It will enable him to retain the full amount of personal allowance for 2014/15 and enable less income to be charged at 40 per cent

C) It will enable him to retain part of his personal allowances and enable less income to be taxed at 45 per cent

D) It will enable less income to be taxed at 45 per cent

Question three

Andrew, Bill and Charlie are business partners. They simultaneously retire in 2014/15, each with a pension fund of £2m. They have no transitional or fixed protection. Andrew, an additional rate taxpayer, takes the excess over the lifetime allowance as a lump sum; Bill, also an additional rate taxpayer, takes his excess as income; Charlie, a higher rate taxpayer, also takes his excess as income. Which of them will pay the highest rate of tax on their excess over the LTA?

A) They will all pay the same amount of tax

B) Andrew

C) Bill

D) Charlie

 

Scroll down for the answers

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Questions supplied by the CPD Centre. For more help keeping up to date with your technical knowledge go to www.ifacpd.com

  

Answers:

1) C

2) B

3) C

 

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