Friday Five – 26 June 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.

Don’t be too harsh with yourself – remember this is for FUN!

Questions
These questions relate to examinable tax year 2014/15, examinable until 31 August 2015.

1. What are the main features of a defined benefit pension scheme?
   1. Individual member’s funds can be identified within the scheme
   2. A fund administered by trustees where the pension is earnings related
   3. Pensions received in retirement are investment related
   4. Employers always know what the cost of providing the scheme will be

2. What portfolio(s) would you expect from an efficient frontier model?
   1. An optimal portfolio with the lowest level of risk
   2. A set of portfolios representing the maximum return for every given level of risk
   3. An optimal portfolio to produce the highest level of return
   4. A set of portfolios representing the minimum risk that can be achieved

3. When would a Capital Gains Tax (CGT) chargeable disposal be deemed to have taken place in the following scenarios?
   1. Sian, a beneficiary under a trust becomes absolutely entitled to the trust assets
   2. James makes a gain of £120,000 on selling his main residence
   3. A married couple change ownership of their investment bond when one becomes a basic rate taxpayer
   4. Peter dies and his antique car is passed to his son in accordance with his wishes

4. Molly was entitled to a tax free cash sum of £400,000 at A-day, based on her £1m total pension fund. Upon crystallising benefits in 2014/15; enhanced protection of her £2m fund would result in a tax free lump sum of:
   1. £400,000.
   2. £800,000.
   3. £720,000.
   4. £500,000.

5. Caroline held an own life with-profits life assurance policy. On her death, the amount payable on the claim will vary depending on which of the following factors?
   1. The amount of premiums paid over the term
   2. Her age
   3. The sum assured
   4. The exact date of death

Answers

1. B – See R01 Study Text, Chp 2 Section B8B
   Grab our taster mock exam paper for CII R01. Click here to download.

2. B – See R02 Study Text, Chp 3 Section A3
   Grab out taster mock exam paper for CII R02. Click here to download.

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

4. B – See R04 Study Text, Chp 2.2 Section F6B
   Grab our taster mock exam paper for CII R04. Click here to download.

5. D – See R05 Study Text, Chp 4 Section G2
   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?

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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