Friday Five – 27 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 2017/18, examinable until 31 August 2018.

1. What are the FCA Principles for Businesses?
   1. Guidelines issued by the FCA to all authorised firms
   2. Statements of the fundamental obligations of all authorised firms
   3. The basis behind many of the FCA rules
   4. Management control systems for authorised firms

2. What characteristic would you associate with fixed interest securities?
   1. Fixed redemption value
   2. High risk
   3. Variable rate of interest
   4. Negotiable long-terms

3. Paul is a beneficiary under the family Interest in Possession trust. He has a personal income of £173,000 and has recently also received £2,000 income generated from the trust’s corporate bond holding. What is Paul’s Income tax liability on this income?
   1. His liability is 40% of the gross income of £2,500
   2. He has no liability as the trustees are responsible for any income tax
   3. His liability is 45% of £2,500 less the 20% tax deducted at source
   4. He has no liability as 20% income tax has been deducted at source

4. John has a defined contribution AVC whereas Tom’s AVC is on an “added years” basis. In which area, will Tom’s arrangement differ from John’s?
   1. Tax relief on contributions.
   2. Some of the benefit can be in the form of tax-free cash.
   3. Minimum pension age.
   4. Inability to draw the benefit independent of the main scheme.

5. Kevin has taken out a lifetime mortgage with a loan-to-value of 25%. How much of the ongoing maintenance costs of the property will his plan provider be liable to pay?
   1. Nil
   2. 25%
   3. 75%
   4. 100%

Answers

1. B – See R01 Study Text, Chp 9
   Grab our taster mock exam paper for CII R01. Click here to download.

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

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

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

5. A – See ER1 Study Text, Chp 5
   Grab our taster mock exam paper for CII ER1. 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!)