Posted by The Team at Brand Financial Training on January 12, 2021 in Newsletter
12 January 2021
The beginning of 2021 isn’t quite turning out as expected, but we hope you are keeping safe and well. At the time of writing, the CII has confirmed that exam centres are remaining open, and there is the option of remote invigilation for exams taken at home. Do take a look at the CII website and contact the CII directly if you require any further information or have any questions in that regard.
We know that many of you are juggling exams, home schooling, and work. Here at Brand Financial Training, our resources remain available to order online 24/7 for immediate access (other than the R03 study text, which is delivered by courier). The team here are also juggling everything involved in lockdown, but we are still available, as usual, via phone and email should you need to contact us; however, it might take us slightly longer than normal to respond. We appreciate your understanding.
Let’s keep focused on that light at the end of the COVID tunnel…
The Team at Brand Financial Training
How to Reduce Inheritance Tax on PETs and CLTs with Taper Relief
Taper relief can be applied to the inheritance tax payable on either a potentially exempt transfer (PET) or a chargeable lifetime transfer (CLT) made three to seven years before death. Here, we discuss PETs and CLTs and provide examples of how tax can be reduced by taper relief – useful reading for those who are studying for any of the CII CF1, R01, R03, R06, AF1, or AF5 exams.
First, let’s quickly remind ourselves of what a PET and a CLT is.
A potentially exempt transfer (PET) is a lifetime transfer that is not liable to IHT at the time the gift is made but is counted in the cumulation for the future. A PET is a gift, not covered by exemptions, by one person to another person, or to a bare trust, or to a trust for a vulnerable or disabled beneficiary. If the person making the gift dies within seven years, the transfer becomes chargeable with taper relief available on any tax payable where death occurs after year 3 (remember, there can only be tax payable if the gift is over the nil rate band). After 7 years, the PET falls outside of the person’s estate.
A chargeable lifetime transfer (CLT) is a gift that is not covered by exemptions and that is not a PET. We normally come across them on lifetime gifts to trusts (other than the two mentioned above). If such gifts are made within the nil rate band, then they are chargeable, although no IHT is payable at the time. They would however be taken into account on the donor’s death and would mean less of the nil rate band available to set against the death estate.
A tax charge of 20% will occur on a CLT if it takes the person’s seven-year cumulation over the nil rate band. If the person making the transfer survives seven years, there will be no further tax to pay. If the donor doesn’t survive seven years, then death rates will apply retrospectively, with relief given for the lifetime tax paid.
Again, if the person survives more than three years after the gift, tax can be reduced by taper relief.
How to Make and Keep your New Year’s Resolutions for 2021
There’s no denying that seeing in 2021 was a unique experience, with limited opportunities to mark the occasion with others. Equally, there are few certainties about what the 12 months ahead may hold, but we can count on the fact that restrictions in some form will likely continue for a while yet. That unpredictability can make the setting of long-term goals a challenging business. Here’s how you can still make and keep your resolutions in these uncertain times.
We’re certainly in a situation that none of us could have predicted this time last year. So you could be forgiven for not quite feeling the usual optimism and positivity that a fresh year typically brings.
Nonetheless, this time of year still marks a chance for reflection, assessment and yes, even a degree of celebration – if only at seeing the back of some challenging months. (After all, would you want to live through 2020 again?)
In fact, setting goals is arguably even more important at a time like this, to stay productive, focused, and feeling in control. You may even find the activity a welcome distraction at a time when it can be easy to feel anxious.
So, in this odd New Year, here are some thoughts on making New Year’s resolutions for 2021 – so that you’re more likely to keep them and not join the 80% of people who (according to the University of Scranton) fail to keep theirs.
Set short-term goals.
Given the lack of certainties, it may be best not to look too far ahead when you’re setting your goals. Aim for weekly or monthly targets, rather than thinking about planning out the whole 12 months. Try and get into the habit of focusing on short blocks of time.
We’re offering brand new resources to support you as you revise for the AF7 Pension Transfers exam. We already offer 3 full sets of mock papers; now we’re pleased to offer two additional resources: Revision Notes and Core Knowledge.
Revision Notes – A streamlined version of the learning outcomes and exam syllabus designed for use when you are further along with your studies. They will be a more focused take on the CII’s exam syllabus and learning outcomes with self-test questions.
Core Knowledge – Key to your core revision of the syllabus, this resource will cover the ‘staple’ questions which make up the majority of the AF7 exam as well as a focus on understanding key calculations from across the syllabus*. You’ll find questions, answers, detailed explanations, and cross-references to the relevant CII study text.
Do take a look here for more info. And don’t forget to check out our best value study kits for an additional 10% off the price of buying these resources individually.
*Whilst you are unlikely to be asked to perform calculations in the exam, you do need to understand the calculation methods.
Insurance Exam Resources Updated for 2021
All resources for IF1, IF2, IF3, IF4, and IF5 have been updated in accordance with the new syllabus examinable from 1 January 2021.
Available for AF1, AF2, AF4, AF7, CF1, CF6, CF8, ER1, FA1-2, IF1-5, J02, J03, J05, J07, J10, J12, LP2, R01-5, and R07
...“I passed my exams 1st time after buying the 3 mock exam packs. They are very relevant and gave me that extra confidence in taking the exam. Thank you Brand 🙂 The service is excellent as well I might add.’...
Passing your CII exam isn’t only about having the necessary knowledge and understanding, it’s about being able to apply that knowledge in an exam setting exactly as needed and in a timely manner. It is essential that you practise multiple exam papers to ensure that you know exactly how to apply your knowledge. Too many people fail due to a lack of exam practice, even if their knowledge is good.
Our mock exam question papers ensure you get the practice you need to achieve exam success. Couple them with other resources in our study kits and you’ll be well prepared for your exam.
All answers include cross references to the relevant CII study text
All questions and answers are kept up-to-date to reflect changes to the exam syllabus and tax year
Written for essential exam practice, but are not duplicates of the CII’s mock papers
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Friday 5 Focus on...
"5 Questions in 5 Minutes Every Friday"
Each week, we ask questions relating to one of these topics: Investments, Taxation, Pensions, Protection, or Regulation. The challenge is for you to answer them in 5 minutes.
Where do I find the Friday Five?
We post each week’s Friday Five to our blog first thing every Friday. You can either visit our blog every Friday at https://brandft.co.uk/blog/ or you can simply go there now, and click on the subscribe button in the top right-hand corner of the blog and sign up to receive notifications of our Friday Five posts.
Note that we don’t email the Friday Five out to everybody every Friday, so we recommend you sign up to our blog at https://brandft.co.uk/blog/ so that you receive an email notification when it is posted. It will only take you a minute to sign up.
A bit of Friday Fun, but with the added benefit of testing your exam knowledge!
Here’s a reminder that the CII update their study texts throughout the examinable year to either incorporate new legislations, correct errors or clarify information. Many candidates aren’t aware of this, which can result in candidates studying out-of-date information.
To find out if you have the most up-to-date information, visit the CII website, navigate to your chosen exam and click on ‘learning solutions update’ in the ‘Unit updates’ section in the sidebar.
Note that we keep our resources up-to-date with any updates from the CII.