Friday Five – 16 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 2016/17, examinable until 31 August 2017.

1. How do the MCOB rules ensure there is uniformity in the market as to the meaning of various terms e.g. the higher lending charge?
   1. The rules give guidance to firms on suggested wordings
   2. Standard terms and meanings must be used in client communications
   3. Regular testing of knowledge is carried out
   4. Individual compliance checks on every form of client communication

2. What information would you expect to find within the title of a bond?
   1. Risk rating
   2. Coupon
   3. Interest payment dates
   4. The primary market the bond was issued from

3. Tamsin makes a transfer of £150,000 to a discretionary trust and 4 years later made a PET of £325,000. She dies 6 ½ years later. All other gifts were covered by the annual allowance. Assuming she had used her annual exemptions elsewhere what is the Inheritance Tax liability?
   1. Nil
   2. £12,000
   3. £24,000
   4. £60,000

4. After a full review, an adviser has recommended to their client that they take out both term assurance cover and income protection insurance. The client only agrees to the term assurance cover. What is best practice as to how the adviser should proceed?
   1. Proceed with the term assurance but ask the client to confirm in writing that they did not want the income protection insurance
   2. Advise the client that they are unable to act for them anymore
   3. Refuse to proceed unless the client accepts the full recommendation
   4. Take no action and suggest that the matter is looked at in the next review meeting

5. Arnold, who was born in 1976, has a stakeholder pension plan. Assuming he remains in good health, the MINIMUM age that he will be able to draw his pension benefits will be:
   1. 55.
   2. 56.
   3. 57.
   4. 58.

Answers

1. B – See R01 Study Text, Chp 5:2
   Grab our taster mock exam paper for CII R01. Click here to download.

2. B – See R02 Study Text, Chp 1.1
   Grab our taster mock exam paper for CII R02. Click here to download.

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

4. A – See R05 Study Text, Chp 10.1
   Grab our taster mock exam paper for CII R05. Click here to download.

5. C – See R08 Study Text, Chp 4
   Grab our taster mock exam paper for CII R08. 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!)