Friday Five – 1 December – 5 Questions in 5 Minutes

Welcome to this week’s Friday Five – 5 Questions in 5 Minutes Every Friday

What’s this all about?

It’s a bit of Friday Fun where we provide you with 5 questions relevant to a mix of CII exams. The challenge is for you to answer them in 5 minutes. Answers at the bottom of the page.

Questions

These questions relate to examinable tax year 2017/18, examinable until 31 August 2018.

1. How does a discretionary trust differ from an absolute trust?
   1. A discretionary trust allows the trustees flexibility over beneficiaries, whereas under an absolute trust the beneficiaries are specifically named
   2. A discretionary trust allows flexibility over which assets to include, whereas an absolute trust covers the whole of the estate
   3. A discretionary trust has an open-ended period for distributing assets, but an absolute trust has a fixed time period
   4. An absolute trust has no interest in possession but a discretionary trust has an interest in possession

2. Paul and Mary are married with two children, aged 16 and 18. How much can they invest in total in ISAs in this tax year?
   1. £64,128
   2. £65,040
   3. £80,000
   4. £84,128

3. Harry has received £150 interest from his corporate bond holding and has been advised that basic rate tax has been deducted. Although both net and gross figures are put on his tax return, which figure will be used to calculate his tax liability?
   1. £187.50
   2. £180.00
   3. £165.00
   4. £150.00

4. Following the death of her husband, Mary has been advised that she may commute the survivor’s pension from his defined benefit scheme for a lump sum. Mary however is considering forsaking it in favour of her niece. The rules relating to this specify that:
   1. there is a lump sum limit of £30,000 which is the maximum lump sum allowed from this scheme.
   2. there is a lump sum limit of £30,000 which is the maximum lump sum commutable across all of her late husband’s schemes.
   3. the lump sum payable is a UFPLS.
   4. the lump sum can be paid to Mary’s niece should she wish as there are no restrictions on who can receive it.

5. Which of the following documents gives the executors of a deceased’s estate proof of title to a life assurance policy?
   1. Grant of probate
   2. Policy document
   3. Death certificate
   4. A solicitor’s letter

Answers

1. A – See R01 Study Text, Chp 3
   Grab our taster mock exam paper for CII R01. Click here to download.

2. D – See R02 Study Text, Chp 6:2
   Grab our taster mock exam paper for CII R02. Click here to download.

3. A – See R03 Study Text, Chp 1
   Grab our taster mock exam paper for CII R03. Click here to download.

4. A – See R04 Study Text, Chp 6:1
   Grab our taster mock exam paper for CII R04. Click here to download.

5. A – See R05 Study Text, Chp 4
   Grab our taster mock exam paper for CII R05. Click here to download.

How did you find this week’s questions? Did you complete them in 5 minutes? Did you get them all correct? Do you disagree with any?

Do let us know by leaving a comment below – we promise to read them all. (Humour particularly appreciated on a Friday!)