AF1
Advanced Diploma in Financial Planning
Unit AF1 – Personal tax and trust planning
February 2023 examination
SPECIAL NOTICES
All questions in this paper are based on English law and practice applicable in the tax year
2022/2023, unless stated otherwise in the question, and should be answered accordingly.
It should be assumed that all individuals are domiciled and resident in the UK unless
otherwise stated.
, AF1 February 2023
Unit AF1 – Personal tax and trust planning
Instructions to candidates
Read the instructions below before answering any questions
• Three hours are allowed for this paper which carries a total of 160 marks as follows:
• Section A: 80 marks
• Section B: 80 marks
• You are advised to spend approximately 90 minutes on Section A and 90 minutes on
Section B, both questions are compulsory.
• You are strongly advised to attempt all questions to gain maximum possible marks.
The number of marks allocated to each question part is given next to the question and you
should spend your time in accordance with that allocation.
• Read carefully all questions and information provided before starting to answer. Your answer
will be marked strictly in accordance with the question set.
• It is important to show all steps in a calculation, even if you have used a calculator.
• Tax tables are provided at the back of the paper.
Subject to providing sufficient detail you are advised to be as brief and concise as possible,
using note format and short sentences.
2
, AF1 February 2023
SECTION A
This question is compulsory and carries 80 marks
Read carefully all information provided in the case study before attempting the questions.
Your answers should take into account the clients’ circumstances as set out in the case study.
Please carry out ALL of the tasks (a), (b), (c), (d), (e), (f), (g) and (h) which follow.
Question 1
Pedro died on 1 January 2023. He was married to Joy, aged 76, and the couple have two children,
James and Pippa, and five grandchildren.
Pedro was employed as an architect until two years ago, when he was aged 70. At that point, he
started to receive the retirement benefits from his employer’s workplace pension scheme.
At the time of his death he had received a total gross pension income of £47,000 in the 2022/2023
tax year, which included his State Pension.
After his employment ended, Pedro continued to work part-time as a self-employed consultant.
Prior to his death he had made profits of £7,250 after expenses in the 2022/2023 tax year.
In September 2022, Joy and Pedro donated £11,200 from their cash deposit account to a local
charity, making the required Gift Aid declaration.
Income received from Pedro’s investments before 1 January 2023:
Investment Account holder Income received in
2022/2023 tax year (£)
Direct Corporate Bonds Pedro 840
General Investment Account (GIA) – UK equity fund Pedro 2,800
Cash ISA Pedro 120
Stocks & Shares ISA - European fund Pedro 160
Cash deposit account Joint 80
Income received from Pedro’s investments after 1 January 2023:
Investment Account holder Income received in
2022/2023 tax year (£)
General Investment Account (GIA) – UK equity fund Pedro 1,600
Cash ISA Pedro 80
Whilst he was self-employed, Pedro contributed to a self-invested personal pension (SIPP), on a
single premium basis at the end of each tax year. The scheme trustees have confirmed they will
use their discretion and pay the death benefits to Joy.
Joy is the executor and sole beneficiary of Pedro’s estate, which was valued at £600,000 when he
died. She is in the process of administering the estate and has recently obtained a Grant of
Probate. Joy is considering investing some of the inherited estate into her Stocks & Shares ISA.
3
Advanced Diploma in Financial Planning
Unit AF1 – Personal tax and trust planning
February 2023 examination
SPECIAL NOTICES
All questions in this paper are based on English law and practice applicable in the tax year
2022/2023, unless stated otherwise in the question, and should be answered accordingly.
It should be assumed that all individuals are domiciled and resident in the UK unless
otherwise stated.
, AF1 February 2023
Unit AF1 – Personal tax and trust planning
Instructions to candidates
Read the instructions below before answering any questions
• Three hours are allowed for this paper which carries a total of 160 marks as follows:
• Section A: 80 marks
• Section B: 80 marks
• You are advised to spend approximately 90 minutes on Section A and 90 minutes on
Section B, both questions are compulsory.
• You are strongly advised to attempt all questions to gain maximum possible marks.
The number of marks allocated to each question part is given next to the question and you
should spend your time in accordance with that allocation.
• Read carefully all questions and information provided before starting to answer. Your answer
will be marked strictly in accordance with the question set.
• It is important to show all steps in a calculation, even if you have used a calculator.
• Tax tables are provided at the back of the paper.
Subject to providing sufficient detail you are advised to be as brief and concise as possible,
using note format and short sentences.
2
, AF1 February 2023
SECTION A
This question is compulsory and carries 80 marks
Read carefully all information provided in the case study before attempting the questions.
Your answers should take into account the clients’ circumstances as set out in the case study.
Please carry out ALL of the tasks (a), (b), (c), (d), (e), (f), (g) and (h) which follow.
Question 1
Pedro died on 1 January 2023. He was married to Joy, aged 76, and the couple have two children,
James and Pippa, and five grandchildren.
Pedro was employed as an architect until two years ago, when he was aged 70. At that point, he
started to receive the retirement benefits from his employer’s workplace pension scheme.
At the time of his death he had received a total gross pension income of £47,000 in the 2022/2023
tax year, which included his State Pension.
After his employment ended, Pedro continued to work part-time as a self-employed consultant.
Prior to his death he had made profits of £7,250 after expenses in the 2022/2023 tax year.
In September 2022, Joy and Pedro donated £11,200 from their cash deposit account to a local
charity, making the required Gift Aid declaration.
Income received from Pedro’s investments before 1 January 2023:
Investment Account holder Income received in
2022/2023 tax year (£)
Direct Corporate Bonds Pedro 840
General Investment Account (GIA) – UK equity fund Pedro 2,800
Cash ISA Pedro 120
Stocks & Shares ISA - European fund Pedro 160
Cash deposit account Joint 80
Income received from Pedro’s investments after 1 January 2023:
Investment Account holder Income received in
2022/2023 tax year (£)
General Investment Account (GIA) – UK equity fund Pedro 1,600
Cash ISA Pedro 80
Whilst he was self-employed, Pedro contributed to a self-invested personal pension (SIPP), on a
single premium basis at the end of each tax year. The scheme trustees have confirmed they will
use their discretion and pay the death benefits to Joy.
Joy is the executor and sole beneficiary of Pedro’s estate, which was valued at £600,000 when he
died. She is in the process of administering the estate and has recently obtained a Grant of
Probate. Joy is considering investing some of the inherited estate into her Stocks & Shares ISA.
3
