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The Technical Quiz – 4 October

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

Question 1: How are profits of a limited liability partnership taxed?

A) Profits are assessed on the LLP but then apportioned on the individual members

B) Profits are assessed on the members in the same way as for a conventional partnership

C) LLP is liable to pay the tax on behalf of the members who are assessed

D) Profits are subject to corporation tax as the LLP is a corporate entity

Question 2: Apart from limited liability what is the key difference between an LLP and a conventional partnership?

A) LLP is assessed to income tax as one entity

B) LLP can effect life policies on the lives of the employees

C) LLP can buy out members on death or retirement

D) LLP is subject to corporation tax on its profits

Question 3: In which UK country or countries is a non-LLP partnership a separate legal entity?

A) England and Wales

B) Scotland and Northern Ireland

C) Scotland

D) England

Question 4: Partners in a partnership, which is not a limited liability partnership, are normally personally liable for:

A) Only the debts for which they have given a personal guarantee

B) The debts of the business to the extent each has contributed capital to the business

C) proportion of the business debts relative to their share of the partnership assets

D) All the debts of the business without limit

Question 5: Automatic accrual on death in the context of business planning for partnerships usually means:

A) The debts of the partnership automatically accrue to the remaining partners and the family get the deceased’s share debt-free

B) The goodwill element in the deceased partner’s capital share in the business will automatically pass to the surviving partners

C) That there is no need for life assurance of any type in connection with the business

D) That the entire value of a partner’s share in the business will automatically pass to the partner’s family

Questions supplied by Technical Connection

____

Answers
1 B
2 B
3 C
4 D
5 B

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