36 Flashcards
(1 cards)
1
Q
Sarah, a higher rate taxpayer, aged 70 has invested £100,000 into a long-term care bond which is held under a gift and loan trust arrangement. She is withdrawing £5,000 per annum from the bond
to pay her long-term care insurance premiums. She should be aware that:
A tax relief of 5% will be available on the premiums.
B there will be an immediate 20% tax charge on the withdrawals.
C there will be an immediate 40% tax charge on the withdrawals.
D the withdrawals will not trigger an immediate tax charge
A
D the withdrawals will not trigger an immediate tax charge
