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UK IFA Flashcards

(46 cards)

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1
Q

What is an ISA?

A

An Individual Savings Account (ISA) is a tax-free savings and investment account in the UK.

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2
Q

True or False: Contributions to an ISA are tax-deductible.

A

False

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3
Q

What is the annual contribution limit for a Cash ISA in the UK?

A

The annual contribution limit for a Cash ISA is £20,000.

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4
Q

What type of income is tax-free in an ISA?

A

Interest, dividends, and capital gains are all tax-free in an ISA.

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5
Q

Fill in the blank: The maximum amount that can be invested in an ISA each tax year is _______.

A

£20,000

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6
Q

What is a Lifetime ISA (LISA)?

A

A Lifetime ISA is a type of ISA that helps individuals save for their first home or retirement.

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7
Q

True or False: You can only open one LISA in your lifetime.

A

False

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8
Q

What is the government bonus on contributions to a LISA?

A

The government provides a 25% bonus on contributions to a LISA, up to £1,000 per year.

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9
Q

What is a Pension scheme?

A

A Pension scheme is a retirement savings plan that offers tax benefits on contributions and investment growth.

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10
Q

What is the annual allowance for pension contributions?

A

The annual allowance for pension contributions is £60,000.

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11
Q

True or False: Pension contributions are taxed at the individual’s income tax rate.

A

False

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12
Q

What is a Stocks and Shares ISA?

A

A Stocks and Shares ISA is an ISA that allows you to invest in stocks, shares, and funds.

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13
Q

What is the primary tax benefit of a Stocks and Shares ISA?

A

Any capital gains and income generated are tax-free.

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14
Q

Fill in the blank: You must be at least ______ years old to open a LISA.

A

18

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15
Q

What is a Unit Trust?

A

A Unit Trust is a type of collective investment scheme that pools money from multiple investors to invest in a diversified portfolio.

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16
Q

True or False: Unit Trusts are subject to capital gains tax.

A

True

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17
Q

What is the tax treatment of dividends received from a Unit Trust?

A

Dividends received are subject to income tax.

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18
Q

What is an Investment Trust?

A

An Investment Trust is a company that invests in a diversified portfolio of assets and is traded on the stock exchange.

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19
Q

True or False: Investment Trusts can offer tax advantages through capital gains.

20
Q

What is the tax treatment of capital gains from Investment Trusts?

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A

Capital gains from Investment Trusts are subject to capital gains tax.

21
Q

What is a Venture Capital Trust (VCT)?

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A

A VCT is a type of investment company that invests in small, high-risk companies and offers tax relief to investors.

22
Q

What tax relief is available for investments in VCTs?

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A

Investors can receive 30% income tax relief on investments up to £200,000 in a tax year.

23
Q

Fill in the blank: The minimum holding period for VCT shares to retain tax relief is ______ years.

24
Q

What is a Child Trust Fund (CTF)?

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A

A CTF is a long-term savings account for children that offers tax-free growth.

25
True or False: Contributions to a Child Trust Fund are tax-deductible.
False
26
What is the age limit for a Child Trust Fund?
A Child Trust Fund can be opened for children born between September 1, 2002, and January 2, 2011.
27
What is a Self-Invested Personal Pension (SIPP)?
A SIPP is a type of personal pension plan that allows individuals to manage their own investments.
28
What is the tax treatment of contributions to a SIPP?
Contributions to a SIPP receive tax relief at the individual's highest rate of income tax.
29
True or False: Withdrawals from a SIPP are tax-free.
False
30
What is an Enterprise Investment Scheme (EIS)?
An EIS is a government scheme that offers tax relief to investors in small, high-risk companies.
31
What tax relief is available for investments in EIS?
Investors can receive 30% income tax relief on investments up to £1 million per tax year.
32
Fill in the blank: EIS investments must be held for a minimum of ______ years to qualify for tax relief.
3
33
What is a Real Estate Investment Trust (REIT)?
A REIT is a company that owns, operates, or finances income-producing real estate.
34
True or False: REIT dividends are tax-free for investors.
False
35
What is the tax treatment of capital gains from a REIT?
Capital gains from a REIT are subject to capital gains tax.
36
What is a Corporate Bond?
A Corporate Bond is a debt security issued by a corporation to raise capital.
37
True or False: Interest from Corporate Bonds is subject to income tax.
True
38
What is a government bond?
A government bond is a debt security issued by the government to finance public spending.
39
What is the tax treatment of interest from government bonds?
Interest from government bonds is subject to income tax.
40
Fill in the blank: The UK government bond is also known as a _______.
Gilt
41
What is a peer-to-peer lending platform?
A peer-to-peer lending platform connects borrowers with individual investors who fund loans.
42
True or False: Interest earned from peer-to-peer lending is tax-free.
False
43
What is the tax treatment of income from peer-to-peer lending?
Income from peer-to-peer lending is subject to income tax.
44
What is a cryptocurrency investment?
A cryptocurrency investment involves buying and holding digital currencies like Bitcoin for potential profit.
45
True or False: Capital gains from cryptocurrency investments are tax-free.
False
46
What is the tax treatment of profits from cryptocurrency investments?
Profits from cryptocurrency investments are subject to capital gains tax.

UK IFA (1 decks)

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