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Friday Five – 17 January – 5 Questions in 5 Minutes

Friday Five – 17 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 2019/20, examinable until 31 August 2020.

  1. Which of the following statements regarding client money is incorrect?
    1. Interest earned on client money belongs to the client unless agreed otherwise.
    2. Client money must be paid into the client bank account by close of business the next working day.
    3. Client money reconciliations must be done every 25 days.
    4. A client bank account must be designated and held with an approved bank.
  1. Fred holds his investments on a platform. He has a stocks and shares ISA, a SIPP and various unit trust and OEIC funds. Which of the following is a potential benefit of him doing this?
    1. The platform may offer automatic portfolio rebalancing.
    2. Platform fees are effectively paid by the product provider.
    3. All future transfers must be carried out ‘in specie’.
    4. He does not need to declare any income received to HMRC.
  1. Jamie is considering selling his business but is concerned about the potential Capital Gains Tax bill he will get if he does. You explain to him that he can claim entrepreneurs’ relief as long as:
    1. he has owned the business for at least two years prior to selling
    2. as shareholder, he holds at least 10% of the voting rights
    3. he has made taxable profits in excess of £500,000 for 3 consecutive tax years
    4. he hasn’t exceeded the lifetime limit of £5m of gains that qualify
  1. Edward, who has no transitional protection of any kind, decides to crystallise the benefits from his employer’s occupational pension scheme. Edward’s fund is valued at £500,000. He intends to take £125,000 as a pension commencement lump sum (PCLS) and use the remainder to buy an annuity. Alternatively, his employer would pay a scheme pension of £17,500, on top of the PCLS. If he takes the offer of the scheme pension, what will his benefits be valued at for lifetime allowance purposes?
    1. £350,000
    2. £475,000
    3. £525,000
    4. £550,000
  1. Sean has an income protection policy with a deferred period of 13 weeks. When should he notify the insurance company in the event that he becomes incapacitated and needs to make a claim?
    1. As soon as possible
    2. After 13 weeks
    3. 4 weeks before the end of the deferred period
    4. No later than 30 days after his incapacity starts

 

Answers

  1. C – See R01 Study Text, Chp 5:2
    Grab our taster mock exam paper for CII R01. Click here to download.
  1. A – See R02 Study Text, Chp 8
    Grab our taster mock exam paper for CII R02. Click here to download.
  1. A – See R03 Study Text, Chp 12
    Grab our taster mock exam paper for CII R03. Click here to download.
  1. B – See R04 Study Text, 5
    Grab our taster mock exam paper for CII 6.1 Click here to download.
  1. A – See R05 Study Text, Chp 6
    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?

If you found this quiz useful for your CII exam revision, please do share it with your colleagues.

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