Module 8 Investments and Pensions Flashcards
What is the annual limit for ISAs?
£20,000
What is the age limit for a Lifetime ISA?
18 to 39
What % of tax relief does the enterprise investment scheme (EIS) offer?
Taxpayers can claim an income tax reducer of the lower of 30% of the amount subscribed (new shares only) or their tax liability for the year
What is the maximum qualifying amount under the EIS?
£1 million, so £300,000 can be income tax reducer
How long do shares need to be held in EIS in order to maintain tax benefits?
3 years for holding shares and CGT is exempt if held over 3 years
How are dividends taxed from EIS shares
Taxed as normal
What is the % of tax relief offerd by Venture Capital Trust?
Taxpayers can claim an income tax reducer of the lower of 30% of the amount subscribed (new shares only) or their tax liability for the year
What is the maximum qualifying amount under the VCT?
£200,000, the maximum income tax reducer is £60,000
How long do shares need to be held in VCT in order to maintain tax benefits?
5 years otherwise tax claw back
How are dividends from VCT taxed?
Dividend tax exempt if paid within the £200,000 limit and CGT is exempt regardless of length of time
What is the maximum gross contribution that an individual cna make which will attract income tax relief?
The higher of £3600 or 100% of UK taxable earnings
What is the annual allowance for tax relief for pension contribution?
£40,000 and this is reduced by £1 for every £2 of net income in excess of £150,000 with a minimum limit of £10,000. Someone with £210,000 will have £10,000 allowance
How long can unused annual allowance be carried forward by?
Three Years on a first in first out basis
What rate of tax is lifetime allowance subject to?
Either 55% if lump sum or 25% for annuity purchase
