Friday Five – 11 October – 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 2019/20, examinable until 31 August 2020.

1. Mrs Evans died in March 2008 when the NRB was £300,000 leaving £50,000 to her niece with the remainder of the estate passing directly to her husband. On Mr Evans’s death on April 2019, the total estate was worth £600,000. What is the IHT due on Mr Evans’s estate if it is all left to his niece?
   1. £110,000
   2. £10,000
   3. £1,671
   4. No IHT due

2. When assessing suitability, MiFID II specifically requires that firms not only take account of investment objectives but also obtain information about a client’s:
   1. knowledge and experience in the investment field concerned
   2. previous gains and losses made on directly held shares
   3. past experience of systematic and non-systematic risk
   4. knowledge of behavioural finance such as prospect theory/loss aversion

3. Miriam has worked in the same company for 15 years and has recently been asked by them to relocate to London to take up a new role. They have offered to reimburse relocation and removal expenses of £10,000. How will Miriam be taxed on this payment?
   1. £2,000 will be tax-free, and £8,000 will be taxable.
   2. £8,000 will be tax-free, and £2,000 will be taxable.
   3. £5,000 will be tax-free, and £5,000 will be taxable.
   4. The whole £10,000 will be tax-free.

4. GAD rates used for capped drawdown are based on which of the following underlying annuity assumptions? Tick all that apply.
   1. Level in payment
   2. Monthly in advance
   3. 10-year guarantee
   4. Single life

5. Which of the following is true in relation to critical illness premiums?
   1. Premiums are more expensive for women.
   2. Premiums are based on mortality statistics.
   3. Reviewable premiums are dependent on the health of the insured.
   4. Guaranteed premiums tend to be higher than reviewable premiums.

Answers

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

2. A – See R02 Study Text, Chp 7
   Grab our taster mock exam paper for CII R02. Click here to download.

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

4. AD – See R04 Study Text, Chp 6:2
   Grab our taster mock exam paper for CII R04. Click here to download.

5. D – See R05 Study Text, Chp 7
   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?

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