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Les’ Big Fat Quiz of the Year

Check your answers

1. Tom and George are trustees of two newly established trusts. As trustees what’s the difference in trustees overall tax liability for dividends received and paid from:

- Tom’s discretionary Trust, and

- George’s Interest in Possession trust

a. 45% - 7.5% = 37.5%

b. 38.1% - 0% = 38.1%

c. 45% - 0% = 45%

d. 38.1% - 7.5% = 30.6%

2. Pension freedom greatly improved the death benefits under defined contributions plans. With regard to death benefits which of the following is the odd one out?

a. Lump Sum

b. Annuity

c. Transfer

d. Drawdown

3. Jimmy is an Edinburgh businessman who usually extracts a £12,999 salary and £87,500 of dividends from his business each year. His cousin George in Essex also runs his own business and also extracts his profits in same manner. How much more income tax will Jimmy pay in 2020/21?

a. £500

b. £0

c. £700

d. £325

4. Dunning Cycles Ltd own an onshore investment bond. The policy started with £100,000 and is in it’s 6th policy year. Due to the boom in bike sales this year they have just topped up by another £50,000. How much tax deferred allowance is available?

a. £30,000

b. £40,000

c. £0

d. £32,500

5. Geoff has a £20,000 salary. He also surrendered an insurance bond he inherited from his parents with a £100,000 gain accrued over 10 full years, giving a “top slice” of £10,000. How much of his salary will be taxed?

a. £0

b. £2,500

c. £12,500

d. £20,000

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"Prudential" is a trading name of Prudential Distribution Limited. Prudential Distribution Limited is registered in Scotland. Registered Office at Craigforth, Stirling FK9 4UE. Registered number SC212640. Authorised and regulated by the Financial Conduct Authority. Prudential Distribution Limited is part of the same corporate group as the Prudential Assurance Company. The Prudential Assurance Company and Prudential Distribution Limited are direct/indirect subsidiaries of M&G plc, a company incorporated in the United Kingdom. These companies are not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in the United Kingdom.