The following update has been made to your workbook edition.
Chapter 1, Section 1.2. The 12 general principles for business have been amended to read as follows:
1. A firm must carry out its business with integrity.
2. A firm must conduct its business with due skill, care and diligence.
3. A firm must take reasonable care to organise and control its affairs responsibly and effectively with adequate risk management systems.
4. A firm must maintain adequate financial resources.
5. A firm must observe proper standards of market conduct.
6. A firm must pay due regard to the interests of its customers and treat them fairly.
7. A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading.
8. A firm must manage conflicts of interest fairly, both between itself and its customers, and between a customer and another client.
9. A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment.
10. A firm must arrange adequate protection for clients’ assets when it is responsible for them.
11. A firm must deal with its regulators in an open and cooperative way, and must disclose to the FCA appropriately anything relating to the firm of which that regulator would reasonably expect notice.
12. A firm must act to deliver good outcomes for retail customers.”
Chapter 3, Section 4.1.4 on Page 167. The paragraphs have been amended to read as follows:
The Tapered Annual Allowance
Individuals with adjusted income in any given tax year greater than £260,000 have their annual allowance restricted for that particular tax year, providing that their threshold income (broadly adjusted income less pension contributions/accruals from all sources) exceeds £200,000. For every £2 of adjusted income above £260,000, the annual allowance will be reduced by £1 until the annual allowance is reduced to £10,000. This is known as ‘tapered annual allowance’.
For the 2023–24 tax year, Samuel earns £370,000. Samuel’s income exceeds the adjusted income limit by £100,000. Samuel’s annual allowance would be reduced to £5,000, which is the standard annual allowance of £60,000 less the £55,000 reduction under the tapering rules.
However, the minimum that the annual allowance can reduce to under the tapered annual allowance rules is £10,000, so Samuel will have a tapered annual allowance of £10,000.
Adjusted income includes not only earned income, but also the value of any pension contributions made by their employer or a third party.
The maximum reduction to the annual allowance will be £50,000, so anyone with adjusted income in excess of £360,000 will have an annual allowance of £10,000.
1. This results in an annual allowance of £60,000 for those with an adjusted income of less than £260,000, a reducing annual allowance for those with adjusted incomes between £260,000 and £360,000, and an annual allowance of £10,000 for those with an adjusted income over £360,000.”
The Answer for Question 50 in the Multiple-Choice Questions on Page 295 has also been amended. The answer has been amended to read as follows:
“ 50. C Chapter 3, Section 4.1.4
The maximum reduction to the annual allowance will be £50,000, so anyone with adjusted income in excess of £360,000 will have an annual allowance of £10,000.
This results in an annual allowance of £60,000 for those with an adjusted income of less than £260,000, a reducing annual allowance for those with adjusted incomes between £260,000 and £360,000, and an annual allowance of £10,000 for those with an adjusted income over £360,000.”