Friday Five – 23 October – 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 2015/16, examinable until 31 August 2016.

1. What information must be given in a direct offer financial promotion? – tick all that apply
   1. Must always mention that tax treatments can change
   2. Confirmation that the firm is regulated or authorised by the FCA
   3. Full name and address of the person offering the investment
   4. Details of any charges and expenses

2. How do exchange traded funds (ETFs) differ from exchange traded notes (ETNs)?
   1. ETNs have a maturity date
   2. ETFs are traded on major stock markets
   3. ETNs performance track the movement of an index
   4. ETFs give access to specialist market niches

3. Dominic sold his house to an interest in possession trust, with the purchase price outstanding. He then set up a separate trust for his children into which he placed the debt and continued to live in the house. What is the most likely charge that Dominic will face from HMRC?
   1. Income tax under the pre-owned assets tax (POAT)
   2. Capital gains tax under CGT legislation
   3. Stamp duty land tax on a reduced valuation of the debt
   4. Income tax under the gift with reservation rules

4. The Trustees of a defined benefit scheme have developed a Recovery Plan for the scheme. This would indicate that the scheme:
   1. Is in deficit.
   2. Is contracted out of S2P.
   3. Has been taken over by the PPF.
   4. Is changing the benefit structure.

5. Aaron lives in a large house converted into flats. He wishes to buy the freehold. Which of the following will prevent him from doing this?
   1. The original lease is for 99 years
   2. Aaron has lived in his flat for 1 year
   3. Half of the tenants have agreed to buy the freehold
   4. All of the qualifying tenants have agreed to buy the freehold

Answers

1. BCD – See R01 Study Text, Chp 7 Section A4C
   Grab our taster mock exam paper for CII R01. Click here to download.

2. A – See R02 Study Text, Chp 6:2 Section I
   Grab our taster mock exam paper for CII R02. Click here to download.

3. A – See R03 Study Text, Chp 4 Section D5
   Grab our taster mock exam paper for CII R03. Click here to download.

4. A – See R04 Study Text, Chp 4.1 Section D4A
   Grab our taster mock exam paper for CII R04. Click here to download.

5. B – See R07 Study Text, Chp 5 Section B1B
   Grab our taster mock exam paper for CII R07. 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!)