Friday Five – 21 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 2018/19, examinable until 31 August 2019.

1. A firm is required to keep a record of its client’s identity verification for 5 years – what form can this take? Tick all that apply.
   1. Photocopies
   2. Original documents
   3. Electronic copies
   4. Serial number log on ID
   5. Computerised copies

2. Caroline invested £12,000 into a unit trust which was worth £18,020 after 6 years. What compound rate of return has she achieved?
   1. 7.01%
   2. 5.01%
   3. 6.21%
   4. 6.72%

3. Edward is a company director and is considering the best way of taking remuneration from his company. What might be a disadvantage for him of taking a low salary and high dividends?
   1. Dividends are not relevant earnings and so could restrict pension contributions.
   2. Corporation tax would be payable at a higher rate as the salary is not being withdrawn from company profits.
   3. A reduced salary would reduce any State pension entitlement in the future.
   4. The dividend payment would be subject to a higher rate of National Insurance.

4. When the administrators of a defined benefit scheme calculate an early leaver transfer value, the process of converting the lump sum value of pension benefits at retirement to a capital value in today’s terms is known as:
   1. discounting
   2. revaluing
   3. capitalising
   4. securitising

5. Donald, a UK resident, placed a life assurance policy in trust in July 2008 for his grandchildren and appointed his two sons, also UK residents, as the trustees. A chargeable event occurred on the policy in July 2018 giving rise to a chargeable gain. On whose income, would the gain be chargeable?
   1. His grandchildren’s
   2. Both his sons equally
   3. Donald’s
   4. The gain would not be chargeable as the policy is in trust

Answers

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

2. A – See R02 Study Text, Chp 4
   Grab our taster mock exam paper for CII R02. Click here to download.

3. A – See R03 Study Text, Chp 11
   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 R05 Study Text, Chp 5
   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.