Practice Paper 3 Flashcards
(18 cards)
Which type of property ownership enables all parties to own 100% of the property?
Joint tennants will all own 100% of the propety
With a joint tenancy agreement, how is ones shares of the property distributed on death?
On death of a joint tenant, their shares automatically pass to the surviving owner of the property
With a tenants in common agreement, how is ones shares of the property distributed on death?
On death of a tenant in common, their share is distributed as per their will or the rules of intestacy.
Which type of NS&I products are tax free?
- Premium Bonds
- ISA’s
- Certificates
- Junior ISA’s
Are all tax free NS&I products
What are the minimum and maximum amounts which you can contribute to Premium Bonds?
The minimum which you can contribute to premium bonds is £25 and the maximum amount you can have in premium bonds is £50,000
How much of your money is protected in Premium Bonds
100% of your money is protected in Premium Bonds, however the protection is not through the FSCS.
What sort of taxation are gains on an offshore bond subject to?
Offshore bonds are subject to income tax on their gains?
How are offshore bonds taxed within the bond wrapper?
Offshore bonds are not taxed within the wrapper and benefit from ‘gross roll up’. However, there may be small amounts of irrecoverable withholding tax on interest and dividends.
State 3 different chargeable events for offshorebonds.
- Taking in excess of the 5% Tax Deferred Allowance
- Full surrender
- Death of a life assured
Are all classed as chargeable events for offshore bonds
What does ASU insurance cover?
ASU covers an individual if they were unable to work due to ill health, injury or redundancy
How is an ASU policy taxed?
ASU policies are paid tax-free
How long does ASU policies pay out for?
ASU polices are designed to be ‘short term’ and pay out for a maximum of 2 years
What 7 things determine the price of income protection?
The price of income protection can be determined by:
- Age
- Occupation
- Smoker status
- Percentage pf income covered
- Deferred period
- Illnesses covered
- Current and family health
Which level of cover for income protection provides the most protection?
Own occupation will provide the most protection, it is also the most expensive
When might decreasing term insurance be used?
Decreasing term assurance is primarily used to cover a liability on death such as a mortgage
What is the aim of a Target Absolute Return Fund
A target absolute return fund aims to provide a positive return in any market conditions. However, there are no guarantees on returns or performance.
Target Absolute Return Funds must state their objective and their time frame to meet it, what is the longest time frame permissible
A target absolute return funds time frame should be no longer than 3 years
State
