Friday Five – 10 July 2015 – 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.

Go!

Questions
These questions relate to examinable tax year 2014/15, examinable until 31 August 2015.

1. What is the correct definition of a derivative?
   1. A contract stating that one or two of the parties will give the other party the difference between the current value of an asset and its value at a later date
   2. The right to buy another type of asset at a higher price within a specified time frame
   3. The obligation to sell another type of asset at a higher price within a specified time frame
   4. The right or obligation to buy or sell another type of asset at a specified price at a specific date and time in the future

2. If the economy is booming, what effect (if any) is it likely to have on the price of fixed interest securities?
   1. No effect
   2. Prices will rise
   3. Prices will need to be pushed up
   4. Prices will fall

3. Assuming all of the following individuals are UK resident but non-UK domiciled which of them could claim the remittance basis without having to pay the annual tax charge? Tick all that apply
   1. Sarah who is aged 20
   2. Claire who has been resident in the UK for 5 out of the last 9 years
   3. Alex who is aged 16
   4. Leo who has unremitted overseas income for the year of £3,000
   5. Duncan who has unremitted overseas income for the year of £1,800

4. In 2014/15, Charles has gross earnings of £160,000 and, in addition, £20,000 income from property rent. He contributes £3,000 per month to a personal pension and makes an annual gross charitable donation of £5,000. His “relevant UK earnings” for pension purposes is:
   1. £180,000.
   2. £160,000.
   3. £155,000.
   4. £152,000.

5. What test is often used to assess a claim under a Long Term Care Insurance plan based on cognitive impairment?
   1. Mini Mental State Examination
   2. Activity of Daily Living assessment
   3. Paramedical Examination
   4. Cognitive Behaviour Therapy

Answers

1. D – See R01 Study Text, Chp 2 Section B6B
   Grab our taster mock exam paper for CII R01. Click here to download.

2. D – See R02 Study Text, Chp 2 Section C1A
   Grab out taster mock exam paper for CII R02. Click here to download.

3. BCE – See R03 Study Text, Chp 12 Section B6B
   Grab our taster mock exam paper for CII R03. Click here to download.

4. C – See R04 Study Text, Chp 2.1 Section A1A
   Grab our taster mock exam paper for CII R04. Click here to download.

5. A – See CF8 Study Text, Chp 6 Section A2E
   Grab our taster mock exam paper for CII CF8. 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!)

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