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The Technical Quiz: 13 June

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

The Technical Quiz MM 480


Fred invests £150,000 in a single premium onshore bond. He takes 4 per cent withdrawals each year for four years and decides to surrender the bond, when it is worth £180,000. What is his chargeable event gain?

A) £30,000

B) £37,500

C) £48,000

D) £54,000


Bertha sets up a discretionary trust for the benefit of her grandchildren. The trustees invest in a life insurance investment bond. Bertha dies on 1 June 2013. Two months later, the trustees decide to surrender the bond and pay the proceeds to the beneficiaries. Who will be taxable on any chargeable event gains?

A) The beneficiaries 

B) Bertha 

C) The trustees

D) The trustees and the beneficiaries


What relief could be available where an investment bond is surrendered at a loss?

A) Final policy year relief

B) Top-slicing relief

C) Deficiency relief

D) Time apportionment relief 


Adam invests £200,000 in a single-premium offshore bond. How much can he withdraw in year three without triggering a tax charge?

A) £10,000

B) £20,000

C) £30,000

D) £40,000


Can withdrawals from an investment bond qualify for the normal expenditure-out-of-income exemption?

A) No

B) Yes

C) Only if they do not affect the donor’s standard of living

D) Only if the donor has established a regular pattern of gifting


Questions supplied by Technical Connection



1 D
2 B
3 C
4 C
5 A


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