1. No CGT on disposal 2. Dividends exempt 3. 30% income tax relief

Answers Flashcards by James Wilkinson

SDLT rates (not first time)

£0 - £125k : 0%
£125k - £250k : 2%
£250k - £925k : 5%
£925k - £1,500k : 10%
£1,500k < : 12%

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Net redemption yield

Gross redemption yield + taxation

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SDLT rates (first time)

£0 - £300k : 0%
£300k - £500k : 5%
£500k < : nulled

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PTM

Panel on Takeovers and Mergers - take £1

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SD rate on share transfer

0.5%

After £1000 the whole transfer is charged and then rounded up to the next £5.

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SDRT rate on share transfer

0.5%

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Impact of rising inflation on gilt prices

Price drops so that interest yield is closer

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Main impact of globalisation on the UK economy

Labour intensive industries are less competitive

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MPT fails to properly consider …

Systematic risk (think no Beta)

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Risk associated smaller unlisted shares

Liquidity risk

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Income tax liability on dividends

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VCT advantages

No CGT on disposal
Dividends exempt
30% income tax relief

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Onshore bond advantages

Liability to basic rate income tax is redeemable as paid within the fund
5% p.a. rule

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Reporting fund advantages

Dividends and interest are treated the same way as UK based funds
Subject to usual CGT rules & allowances

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“Roll up fund” meaning

“All income is accumulated and no dividends are paid” like non-reporting funds

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NAV & price for ITs, UTs, and OEICs

IT - different
UT - same
OEIC - same

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Advantage of offshore bond for additional rate taxpayer

Gains can be offset until policy end when retired

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PAIF main features

Property Authorised Investment Fund -

Authorised to buy property
Share price inseparable from underlying assets
Income tax reclaimable

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Money Market funds (short vs. standard)

Short
WA maturity : 60 days
WA lifespan : 120 days

Standard
WA maturity : 6 months
WA lifespan : 12 months

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Preference shares

Fixed interest style so pay even when no money for ordinary dividends
Bonds > Preference shares > Ordinary shares

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Risk associated with futures contracts

Counterparty risk

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SDRT on ETFs

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ETF tracking error

Study These Flashcards

Low compared to benchmark

Age child assumes responsibility over JISA

Study These Flashcards

1 - TWR = | in terms of MWR

(MWR)(MWR)(MWR)... | Money Weighted Return for each period

Property Investment Funds features

- No claiming income tax - Lots of commercial property investment - Regular professional valuations

REIT payments (tax)

Dividend (allowance then 7.5%, 32.5%, 38.1%)

Compare AMCs for ITs, UTs, and OEICs

Same as each other

Normal yield curve

Longer time to maturity means higher interest rates

How long can a trustee close registry for?

30 days p.a.

Compare investment choices for ITs and UTs

IT has less investment choices

Feature of OTC

Tailored to client

Top-slicing with child benefits

None

Dominant investment model

MPT by Harry Markowitz

NAV restrictions for investor

- NAV is an accounting value. On liquidation, the value will likely end up different - doesn't consider goodwill

Preference share features

- No voting | - 6 month dividends

MWR limitation

Can't be used to compare two fund manager performances

EIS features

- income tax relief at 30% (can be carried back) - CGT exempt after 3 years - CGT can be deferred by reinvesting in EIS

Two considerations when determining success/failure of a portfolio through evaluation

1. Composition of portfolio compared to benchmark | 2. Effects of asset allocation

UT tax rates (dividends & interest)

Dividends: £2k allowance & normal income tax Interest: £1k, £500, £0 & normal income tax

Discretionary trust tax rates (dividends and interest)

Dividends: 7.5% < £1000 < 38.1% Interest: 20% < £1000 < 45%

A call option give the buyer of the option the right to …

Buy the underlying asset

European style options have to…

wait until expiry to decide whether to call/put

Onshore bond income tax

Cash, fixed interest, property : 20% | Equities : 0%

Offshore bond tax on income

Value management style typical in …

Uk equity income funds | Looks for undervalued stocks

Momentum management style typical in ….

Middle of the road fund managers | Invests with market momentum

Distribution bond

Split capital & income so that income paid reflects income generated

Insurance company property fund cannot

Borrow

VCT relief

30% up to an investment of £200,000

SEIS tax relief

50% up to £100,000

EIS tax relief

30% up to £2,000,000

SAYE must be invested in ISA within…

90 days

PLA vs. Pension annuity tax

Pension annuity taxed in full | PLA tax free element

Arbitrage uses which strategy?

Relative value

FTSE Small Cap is reviewed

Quarterly

Two non equity index trackers

FTSE Sterling Corporate Bond | FTSE UK Gilts

Answers Flashcards

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