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The Technical Quiz: 25 July

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

QUESTION ONE: How much income tax is payable by a higher rate taxpayer on dividends received from a qualifying VCT investment?

A) 10%

B) 32.5%

C) 42.5%

D) They are exempt

QUESTION TWO: How much income tax relief is available on a qualifying VCT investment?

A) 20% on £200,000

B) 30% on £200,000

C) 20% on £300,000

D) 30% on £300,000

QUESTION THREE: In which circumstances can an investor defer capital gains tax when investing in a VCT?

A) Capital gains cannot be deferred

B) Only if the investment is for the qualifying amount

C) Only if the investment is for qualifying amount and made within 3 years of realising the gain

D) Only if the investment is for qualifying amount and made within 5 years of realising the gain

QUESTION FOUR: How long must an investor hold VCT shares to be exempt from capital gains tax?

A) 2 years

B) 3 years

C) 5 years

D) There is no minimum period

QUESTION FIVE: When will income tax relief be withdrawn on a VCT investment?

A) If shares are disposed of in 2 years

B) If shares are disposed of in 3 years

C) If shares are disposed of in 5 years

D) Never

Questions supplied by Technical Connection

_________

Answers

1 D
2 B
3 A
4 D
5 C

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