Friday Five – 16 June – 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

IMPORTANT!  These questions relate to examinable tax year 2016/17, examinable by the CII until 31 August 2017.  They do not relate to tax year 2017/18 which is only examinable by the CII from 1 September 2017.

1. Which of the following bodies are exempt from FCA authorisation? Tick all that apply.
   1. The European Central Bank
   2. The Bank of England
   3. Local authorities
   4. Lloyds of London

2. Jenna’s portfolio was valued at £30,000 at the start of the year. £3,000 was withdrawn after six months. At the end of the year, the portfolio was valued at £34,000. Jenna’s adviser is calculating the rate of return. Tick all that apply.
   1. Jenna’s adviser is measuring the performance of the portfolio
   2. Jenna’s adviser is evaluating the performance of the portfolio
   3. the money-weighted rate of return for Jenna’s portfolio is 3.17%
   4. the money-weighted rate of return for Jenna’s portfolio is 3.51%

3. Elaine is a basic rate taxpayer. She is also a beneficiary under an Accumulation and Maintenance trust and has received net income of £1,650. Which of the following is correct regarding this income?
   1. Elaine is deemed to have received gross income of £3,000
   2. The settlor of the trust will reclaim any tax on Elaine’s behalf
   3. She has no further liability but neither can she reclaim any tax
   4. She will have a further liability less the amount taxed at source

4. Helen has made a chargeable gain of £4,500 on the surrender of her non-qualifying life assurance policy. If her taxable income in 2016/2017 is £40,000 she will be liable for which of the following taxes on the gain?
   1. Capital gains tax at 10%
   2. Capital gains tax at 20%
   3. Income tax at 20%
   4. Income tax at 40%

5. In 2016/17 Josh wishes to access his pension benefits before the minimum pension age due to ill-health. Assuming he meets the ill-health conditions, which of the following options are available to him?
   1. Only a trivial commutation lump-sum payment.
   2. A trivial commutation lump-sum payment and a small pots payment.
   3. A trivial commutation lump-sum payment, a small pots payment and an uncrystallised funds pension lump sum payments.
   4. Only an uncrystallised funds pension lump sum.

Answers

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

2. AD – See R02 Study Text, Chp 9
   Grab our taster mock exam paper for CII R02. Click here to download.

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

4. C – See R05 Study Text, Chp 5
   Grab our taster mock exam paper for CII R05. Click here to download.

5. C – See R08 Study Text, Chp 1
   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!)