Friday Five – 10 March – 5 Questions in 5 Minutes
Last updated on September 25th, 2019 at 4:32 am
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 2016/17, examinable until 31 August 2017.
- Capital markets developed to meet which of the following objectives?
- To allow individuals to make profitable investment in banks
- To allow FTSE 100 companies to invest in real assets
- To provide an asset class for diversification purposes
- To invest in assets which offer potential for real growth
- Which of the following is normally associated with liquidity risk?
- Derivatives
- Cash
- Property
- Fixed interest
- Edward is a company director and is considering the best way of taking remuneration from his company. What might be a disadvantage for him of taking a low salary and high dividends?
- Dividends are not relevant earnings and so could restrict pension contributions
- Corporation tax would be payable at a higher rate as the salary is not being withdrawn from company profits
- A reduced salary would reduce any State pension entitlement in the future
- The dividend payment would be subject to a higher rate of National Insurance
- Rory, an additional rate tax payer, has been given a refund of his employee pension contributions after leaving his company within six months of joining their defined benefit pension scheme. He receives a lump sum payment of £12,000. How much tax, if any, has been paid by the scheme administrator?
- None, Rory must declare the lump sum on his self-assessment form and pay tax at his marginal rate
- £3,000
- £9,818
- None, Rory must declare the lump sum on his self-assessment form and pay tax at the basic rate
- Paul made a PET of £450,000 in June 2012. If he dies in September 2016, how much inheritance tax would the donee be liable for? (Assume no annual allowances are available).
- £30,000
- £180,000
- £50,000
- £102,000
Answers
- D – See R01 Study Text, Chp 1
Grab our taster mock exam paper for CII R01. Click here to download.
- C – See R02 Study Text, Chp 5
Grab our taster mock exam paper for CII R02. Click here to download.
- A – See R03 Study Text, Chp 11
Grab our taster mock exam paper for CII R03. Click here to download.
- B – See R04 Study Text, Chp 4
Grab our taster mock exam paper for CII R04. Click here to download.
- A – See R05 Study Text, Chp 5
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!)
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