Friday Five – 28 February – 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 2019/20, examinable until 31 August 2020.

1. Premiums for payment protection insurance contracts must be:
   1. paid by monthly contribution added to the loan
   2. paid by lump sum contribution added to the loan
   3. paid monthly
   4. paid weekly

2. If a savings account accrues 10% interest payable on a quarterly basis, what would the interest accumulation factor be?
   1. 2.5% compounded quarterly
   2. 4/10%
   3. 10% compounded quarterly
   4. 1.25 to the power of 4

3. Simon is considering using a discretionary trust to make provision for his children and future grandchildren as well as to mitigate his own Inheritance Tax (IHT) position. He should be aware that: Tick all that apply.
   1. the transfer in is a chargeable lifetime transfer
   2. capital distributions to a beneficiary may trigger an exit charge
   3. the beneficiaries are entitled to an equal amount of income and capital
   4. if a beneficiary dies, there is no charge to IHT on the beneficiary’s estate

4. Andrew, aged 66, was in capped drawdown prior to 5 April 2015. The following information is available relating to Andrew.
    
   

   Fund, after PCLS, is £300,000

   GAD rate is £56 per £1,000

   Gilt yield on 15th of previous month = 2.37%

    
   Which of the following rules will apply to him? Tick all that apply.
   1. The gilt yield used when calculating maximum withdrawal rate will be 2.25%.
   2. Maximum income available is £25,200.
   3. Minimum income is zero.
   4. Income reviews must be annual.

5. Basic Personal Care is means-tested in every country in the United Kingdom except?
   1. England
   2. Wales
   3. Northern Ireland
   4. Scotland

Answers

1. C – See R01 Study Text, Chp 2
   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. ABD – See R03 Study Text, Chp 4
   Grab our taster mock exam paper for CII R03. Click here to download.

4. ABC – See R04 Study Text, Chp 6:2
   Grab our taster mock exam paper for CII R04 Click here to download.

5. D – See CF8 Study Text, Chp 3
   Grab our taster mock exam paper for CII CF8. 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.