Friday Five – 11 March – 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. Client records must be kept indefinitely for which of the following? – tick all that apply
   1. Life policies
   2. Regular pension policies
   3. Pension transfers
   4. Free Standing Additional Voluntary Contributions
   5. Pension opt-outs

2. If a bond’s redemption yield is higher than its interest yield, what does this indicate?
   1. The bond has just made an interest payment
   2. There will be a capital gain if held till maturity
   3. The issuer has a strong credit rating
   4. The bond’s proceeds will be tax-free

3. Bernadette gifted a property to her daughter which at the time was valued at £500,000. Bernadette died 3½ years later, at which time the house was valued at £600,000. Bernadette used her annual allowance each year. How much IHT is payable by Bernadette’s daughter in respect of the gift assuming she died in this tax year?
   1. £240,000
   2. £110,000
   3. £70,000
   4. £56,000

4. Sportsman Joe retires in 2015/16 at the age of 35. Joe’s lifetime allowance will be reduced by what percentage for each complete year before normal minimum pension age:
   1. 10%.
   2. 5%.
   3. 2.5%.
   4. 1.5%.

5. What effect will an increase in interest rates have on a shared appreciation mortgage?
   1. Monthly payments will increase
   2. No effect
   3. Amount of overall debt will increase
   4. Lender will require a larger share of appreciation on eventual sale of property

Answers

1. CDE – See R01 Study Text, Chp 6, Section C1
   Grab our taster mock exam paper for CII R01. Click here to download.

2. B – See R02 Study Text, Chp 1:1, Section B4B
   Grab our taster mock exam paper for CII R02. Click here to download.

3. D – See R03 Study Text, Chp 4 Section B2D
   Grab our taster mock exam paper for CII R03. Click here to download.

4. C – See R04 Study Text, Chp 2:2 Section D1B
   Grab our taster mock exam paper for CII R04. Click here to download.

5. B – See ER1 Study Text, Chp 5 Section G
   Grab our taster mock exam paper for CII ER1. 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!)