To help you to keep up with the fundamentals of tax, retirement and financial planning, try answering these questions.
Agatha wants to make a pension contribution for her granddaughter. Will this receive tax relief?
No, contributions made by third parties do not receive tax relief
Yes, she will be able to make an unlimited contribution and obtain tax relief on the pension payments
Yes, the contribution will be treated as if paid by the member herself and is subject to the usual tax relief rules
No, the third party contribution is treated as a chargeable lifetime transfer
Peter has £150,000 to invest in either EIS shares or VCT shares. He is risk cautious. How would you advise him?
Invest in either EIS or VCT shares, as they are both low risk investments
It would be better to invest in EIS shares, as these are unquoted trading company shares and less risky than VCT shares
It would be better to invest in VCT shares, as these are quoted company shares and less risky than EIS shares
Invest in the EIS shares so long as Uijo has control of the company
Anne and Charlie are married. Anne is a higher rate taxpayer and Charlie has no income. They have £30,000 to invest and want some advice on how this can be structured to minimise income tax?
Invest the full amount in Charlie’s name so that any interest generated from the funds will be either covered by Charlie’s personal allowances or assessed at 20 per cent
Invest in joint names so they are assessed on half the interest each
Invest the full amount in Charlie’s name so that he can receive relief for the capital invested
Invest in the names of their minor children
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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