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Friday Five – 12 January – 5 Questions in 5 Minutes

Friday Five – 12 January – 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 2017/18, examinable until 31 August 2018.

  1. Which of the Competition and Markets Authority (CMA) strategic goals aims to ‘deter wrongdoing, protect consumers and educate businesses’?
    1. Delivering effective enforcement
    2. Extending competition frontiers
    3. Achieving professional excellence
    4. Developing integrated performance
  1. Which of the following characteristics would you associate with an Open-Ended Investment scheme (OEIC)? Tick all that apply.
    1. Generally, carry an initial charge and an annual management fee
    2. Assets are held for investors by trustees
    3. Allows investors to participate in a large portfolio of shares
    4. The value will depend upon the value of the underlying assets
  1. Hattie’s holiday home was valued at £120,000 when she gifted it to her cousin. Hattie continued to enjoy several months of rent free holidays each year until her death at which point the house was worth £150,000. What are the implications of Hattie’s actions for Capital Gains Tax (CGT) & Inheritance Tax (IHT) purposes?
    1. Hattie’s death triggers a liability to CGT on £30,000 and £150,000 is included in her estate for IHT purposes
    2. The gift was not a disposal for CGT and £120,000 is included in her estate for IHT purposes
    3. The gift was a disposal for CGT and £120,000 is included in her estate for IHT purposes
    4. The gift was a disposal for CGT and £150,000 is included in her estate for IHT purposes.
  1. 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.
  1. Louise, a widow aged 75, lives in a house valued at £600,000 that she is finding very hard to maintain on her level of income. She asks for advice about releasing equity to boost her income, what course of action would you suggest she considers first?
    1. Home Income Plan
    2. Shared Appreciation Mortgage
    3. Trading down to a lower cost property
    4. Drawdown scheme

 

Answers

  1. A – See R01 Study Text, Chp 4
    Grab our taster mock exam paper for CII R01. Click here to download.

 

  1. ACD – See R02 Study Text, Chp 6:1
    Grab our taster mock exam paper for CII R02. Click here to download.

 

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

 

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

 

  1. C – See ER1 Study Text, Chp 6
    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!)

 

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