Friday Five – 19 May – 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 is one of the “three certainties” required for a trust to be valid?
   1. Perpetuity period
   2. Name of trustees
   3. Subject matter
   4. Accumulation period

2. If a company has a high dividend cover, what might this suggest? Tick all that apply.
   1. The company is paying out too much profit and the position is unsustainable
   2. The company is retaining the majority of its earnings
   3. The company is able to maintain the existing dividend if profits fell
   4. The majority of profits are being paid to shareholders with little reinvestment in the business

3. Maureen has an asset that is worth so little that it qualified for a ‘negligible value claim’ on the 1st September 2014. She now wants to backdate a claim for the loss she’s made to that tax year. Which of the following dates is the deadline for her to backdate the claim to 2014/15?
   1. 5 April 2016
   2. 30 July 2016
   3. 30 January 2017
   4. 5 April 2017

4. Alan’s 61st birthday is tomorrow. He has 25 years’ service in a 1/60ths final salary scheme. His pensionable remuneration is £40,000. The scheme’s normal retirement age is 65. If Alan retires tomorrow and the scheme reduces his pension by 0.5% per month for early retirement, how much will his annual scheme pension be?
   1. £12,666.67
   2. £14,000.00
   3. £16,333.34
   4. £16,666.67

5. Which of the following categories of income is fully disregarded for care contribution assessment purposes?
   1. Capital withdrawals from a capital investment bond
   2. Income from a Permanent Health Insurance policy
   3. Income from a mortgage protection policy
   4. Attendance Allowance

Answers

1. C – See R01 Study Text, Chp 3
   Grab our taster mock exam paper for CII R01. Click here to download.

2. BC – See R02 Study Text, Chp 1:2
   Grab our taster mock exam paper for CII R02. Click here to download.

3. D – See R03 Study Text, Chp 12
   Grab our taster mock exam paper for CII R03. Click here to download.

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

5. C – See CF8 Study Text, Chp 3
   Grab our taster mock exam paper for CII CF8. 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!)