Friday Five – 11 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 2015/16, examinable until 31 August 2016.

1. Which of the following statements accurately describes gilts?
   1. They pay a variable level of interest once a year
   2. They pay a fixed level of interest at regular intervals
   3. At the end of the term a percentage of the original capital is returned
   4. They are issued by HM Revenue and Customs

2. If a portfolio generates a total return of 8% over the last 12 months and the benchmark rose by 6% what is the relative return?
   1. 2%
   2. 1.33%
   3. 0.75%
   4. 0.50%

3. Simon makes a £7,500 contribution to his employer in respect of his new company car. How will this be treated when calculating the taxable benefit?
   1. £7,500 will be deducted from the list price
   2. £5,000 will be deducted from the list price
   3. The contribution is ignored in the calculation
   4. The first £2,500 of the contribution is deducted

4. The minimum employer contribution for auto-enrolment purposes once fully phased in is:
   1. 3% of total earnings.
   2. 3% of qualifying earnings.
   3. 8% of qualifying earnings.
   4. 8% of total earnings.

5. George, a key person of Romulus Ltd is currently off work after an accident and receiving an income from an income protection plan taken out by his employer. How are the benefits from the policy treated in relation to the company’s taxation?
   1. They are taxable only if they exceed £1,000 per month
   2. They are free from any liability for tax
   3. They are paid as a regular income and therefore taxable
   4. Any excess over £1,000 per month is taxable

Answers

1. B – See R01 Study Text, Chp 1 Section A2
   Grab our taster mock exam paper for CII R01. Click here to download.

2. A – See J10 Study Text, Chp 9 Section B2
   Grab our taster mock exam paper for CII J10. Click here to download.

3. B – See R03 Study Text, Chp 1 Section G3F
   Grab our taster mock exam paper for CII R03. Click here to download.

4. B – See R04 Study Text, Chp 1 Section A3
   Grab our taster mock exam paper for CII R04. Click here to download.

5. C – See R05 Study Text, Chp 10.2 Section H6C
   Grab our taster mock exam paper for CII J12. 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!)