8. Tax Planning

Question 1

Explain tax treatment of investment bonds issued by life insurers? (3)

Answer 1

5% of original capital can be withdrawn with no tax
Cumulative
Tax paid on final encashment

Question 2

Key features of EIS scheme?

Answer 2

30% tax relief
Up to £1m p.a

Question 3

Key features of VCT?

Answer 3

30% tax relief
Up to £200k p.a

Question 4

Key features of SEIS?

Answer 4

50% tax relief
Up to £200k p.a

Question 5

What happens when an ISA holder dies?

Answer 5

ISA becomes continuing ISA

Surviving spouse can transfer value into their own ISA - additional permitted subscription (higher of value at death and value when closed)

Available until earlier of:
- completion of estate admin
- 3 years after death