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Friday Five – 25 September 2015 – 5 Questions in 5 Minutes

Friday Five – 25 September 2015 – 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 are the alternatives for a company facing liquidation?
    1. Bankruptcy or winding the company up
    2. Administration or a voluntary arrangement
    3. Disqualification or removing the company from the Registrar of Companies
    4. Appoint a solvency practitioner or Official Receiver
  1. Why might an investor want an investment gain to be realised under an OEIC instead of via an onshore bond? Tick all that apply
    1. If the gain is as a result of a fund switch
    2. To utilise their annual CGT exempt amount
    3. Tax rates would be lower, especially for higher and additional rate taxpayers
    4. To be able to reclaim the 10% tax credit on dividends
    5. It is easier to offset losses against gains
  1. Martin and Suzanne are the trustees of a discretionary trust where the investment portfolio is made up mainly of equities. They are concerned with the capital gains tax (CGT) implications of any future disposals they make. Which of the following statements are correct? Tick all that apply
    1. Trust gains are taxed at the threshold rates of 18% and 28%
    2. Gains are calculated on the difference between the acquisition cost and the market value
    3. Trustees can elect holdover relief on any disposal
    4. If the settlor subsequently acquires an interest any holdover relief claimed when the trust was set up will be clawed back
  1. What is considered first by the investment manager using the top-down approach to investment?
    1. Asset allocation
    2. Sector selection
    3. Stock selection
    4. Economic changes
  1. New rules came into force on 6 April 2015, which require firms to give appropriate risk warnings to consumers accessing their pension funds. It is CORRECT to say that the retirement risk warnings:
    1. only have to be given where the consumer requests to access their pension savings verbally.
    2. are instead of guidance given by Pension Wise.
    3. are based on how the consumer wants to access their pension savings, and on which risk factors are present.
    4. cannot be given without providing regulated advice.

 

Answers

  1. B – See R01 Study Text, Chp 3 Section F4
    Grab our taster mock exam paper for CII R01. Click here to download.

 

  1. B,C,E – See R02 Study Text, Chp 8 Section G3
    Grab our taster mock exam paper for CII R02. Click here to download.

 

  1. B,C,D – See R03 Study Text, Chp 3 Section I1
    Grab our taster mock exam paper for CII R03. Click here to download.

 

  1. A – See J12 Study Text, Chp 4 Section F1
    Grab our taster mock exam paper for CII J12. Click here to download.

 

  1. C – See R08 Study Text, Chp 2 Section B1B
    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!)

 

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