Friday Five – 11 August – 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

IMPORTANT!  These questions relate to examinable tax year 2016/17, examinable by the CII until 31 August 2017.  They do not relate to tax year 2017/18 which is only examinable by the CII from 1 September 2017.

1. Why is income relevant in determining the amount of protection a client needs?
   1. Because income and expenditure analysis will determine the shortfall
   2. Lower income levels suggest a lower standard of living
   3. To determine the amount of cover required and affordability
   4. Higher income levels are normally associated with higher employment benefits

2. The FT Ordinary Share Index is the oldest FT Index; how does it differ from the FTSE100? Tick all that apply.
   1. It is based on a geometric mean and un-weighted
   2. The price index is the sum of market values of all companies within the index
   3. Its aim is to cover a specific area of the main market
   4. Stock has to be liquid and readily tradable
   5. It consists of 30 shares in leading UK companies

3. Alex has recently bought £5,400 worth of shares through an online platform provider. Which of the following is he liable for?
   1. Stamp duty of £30
   2. Stamp duty of £27
   3. Stamp duty reserve tax of £30
   4. Stamp duty reserve tax of £27

4. It is possible that certain individuals may be entitled to a higher lifetime allowance. Who would NOT qualify for this?
   1. Non-UK residents.
   2. All members of Public Service Schemes.
   3. Those with benefits transferred in from a recognised overseas scheme.
   4. Pre A-day divorcees, in receipt of a pension credit.

5. How are benefits taxed under a deferred care plan?
   1. All benefits liable to basic rate tax
   2. Treated as part income and part capital whoever benefits are paid to
   3. Free of tax if paid to a care provider, treated as part income and part capital if paid to the planholder
   4. All benefits free of tax

Answers

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

2. AE – See R02 Study Text, Chp 1:2
   Grab our taster mock exam paper for CII R02. Click here to download.

3. D – See R03 Study Text, Chp 7
   Grab our taster mock exam paper for CII R03. Click here to download.

4. B – See R04 Study Text, Chp 2:1
   Grab our taster mock exam paper for CII R04. Click here to download.

5. C – See CF8 Study Text, Chp 5
   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!)