Income Tax And Investment Advice

Question 0

Is it acceptable for a firm to be appointed tax advisers to both the companies’ directors as well as to the company?

Answer 0

ACCA code of ethics relating to objectivity addresses matter
Issues arise due to conflict of interest between related clients
Firm must obtain consent to act of both parties
Safeguards must be present ( identification of difference teams, confidentiality)

Question 1

What matters should a couple consider when considering holding jointly held assets?(4)

Answer 1

Income on assets are automatically split 50:50

An election must be made on alternative split

Both persons entitled to their own annual exemption on CGT

Gain on disposal of asset apportioned according to ownership share

Question 2

Identify any non-tax matters relevant to the investment decision of which one should be aware.

Answer 2

Risk:

Investments such as VCT has portfolios which contains 70% stock from unquoted trading companies whereas pension fund holders are more diversified

Timing:

VCT investments are medium term as tax reliefs will be withdrawn if sold before 5 yrs whereas pension funds as longer term and withdrawn at retirement age of 55 or if an individual is incapacitated