Tax year end planning

Last Updated: 1 Feb 23 90 min watch

Event summary

This was the third of four Tax Year End events. Having previously focused on Small and Medium sized Enterprise (SME) business owners and direct investors, The Technical Team then looked more broadly at Tax Year End planning considerations for other individuals.

 

Les Cameron (Head of Technical, M&G Wealth)
Dawson, Barrie (Technical Manager, M&G Wealth)

On this event, the M&G Wealth Technical Team looked at pension funding for those pre, approaching and in retirement. For those with one eye on the frozen Inheritance Tax (IHT) allowances, they looked at what can be done from an IHT point of view.

90 minute video (approximately)     I     Structured CPD accredited by CII and CISI 

Learning outcomes

By the end of this session, you will be able to:

  • Describe the operation of pension tax relief
  • Identify individuals who can benefit from higher than marginal rate tax relief
  • Describe the operation of the main IHT exemptions

Claiming your CPD

1. Assuming no growth or lifetime allowance issues, which of the following individuals would have the highest return on exit after making a gross £100 relief at source contribution?

a) Tom, who’s basic rate on entry but a non-taxpayer on exit.

b) Sue, who’s basic rate on entry but basic rate on exit.

c) Sal, who’s additional rate on entry but higher rate on exit.

d) Fay, who’s higher rate on entry and higher rate on exit.

 

2. The effective rate of tax relief on a pension contribution is the same regardless of whether the contribution is made using the relief at source method or net pay method:

a) True

b) False

 

3. An individual has a Whole of Life policy in trust to which they pay premiums of £200 pm. Which of the following IHT exemptions might apply to the premiums?

a) Small gifts exemption only

b) Small gifts exemption in conjunction with the Annual exemption

c) Normal expenditure out of income exemption only

d) The Normal expenditure out of income and/or the Annual exemption

 

4. Laura makes gifts of £2,500 to each of her 4 grandchildren and £5,000 to each of her 2 children. The gifts are all made on the same day. Assuming no other exemptions apply how would the Annual exemption be apportioned between these gifts?

a) £500 of each gift would be exempt

b) The gifts to the children would receive half the exemption each because they’re larger gifts

c) The exemption would be split between the gifts to the grandchildren because they are less than the £3,000 limit

d) £375 of the gifts to each of the grandchildren would be exempt and £750 of the gifts to each of the children would be exempt

1. Assuming no growth or lifetime allowance issues, which of the following individuals would have the highest return on exit after making a gross £100 relief at source contribution?

a) Tom, who’s basic rate on entry but a non-taxpayer on exit.

b) Sue, who’s basic rate on entry but basic rate on exit.

c) Sal, who’s additional rate on entry but higher rate on exit.

d) Fay, who’s higher rate on entry and higher rate on exit.

 

2. The effective rate of tax relief on a pension contribution is the same regardless of whether the contribution is made using the relief at source method or net pay method:

a) True

b) False

 

3. An individual has a Whole of Life policy in trust to which they pay premiums of £200 pm. Which of the following IHT exemptions might apply to the premiums?

a) Small gifts exemption only

b) Small gifts exemption in conjunction with the Annual exemption

c) Normal expenditure out of income exemption only

d) The Normal expenditure out of income and/or the Annual exemption

 

4. Laura makes gifts of £2,500 to each of her 4 grandchildren and £5,000 to each of her 2 children. The gifts are all made on the same day. Assuming no other exemptions apply how would the Annual exemption be apportioned between these gifts?

a) £500 of each gift would be exempt

b) The gifts to the children would receive half the exemption each because they’re larger gifts

c) The exemption would be split between the gifts to the grandchildren because they are less than the £3,000 limit

d) £375 of the gifts to each of the grandchildren would be exempt and £750 of the gifts to each of the children would be exempt

Before collecting your certificate please take a moment to provide us feedback on this session, please email prudential.distribution.team@prudential.co.uk

Complete the form below and we’ll email your CPD confirmation to you. Please use the email address that you would usually use when making contact with us.

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