Friday Five – 30 March – 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

IMPORTANT!  These questions relate to examinable tax year 2017/18, examinable by the CII until 31 August 2018.  They do not relate to tax year 2018/19 which is only examinable by the CII from 1 September 2018.

1. The rules around the selling and marketing of general insurance and pure protection life policies are contained within which of the following?
   1. ICOBS
   2. CASS
   3. COBS
   4. MAR

2. Sue is a basic rate taxpayer and David is a higher rate taxpayer. They have recently invested in the following investments:
   

   Name	Type	Investment	Current Value
   Sue	Venture Capital Trust	£50,000	£60,000
   David	Enterprise Investment Scheme	£50,000	£29,000

   From this information, you can advise Sue and David that:
   1. Sue received more tax relief on her investment than David
   2. only the dividends on David’s investment are tax free up to £200,000
   3. only David could have deferred capital gains by reinvesting in EIS shares
   4. Sue must retain her shares for 5 years to enjoy CGT exemption

3. 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. was contracted out of S2P.
   3. has been taken over by the PPF.
   4. is changing the benefit structure.

4. Doreen has savings and investments of £20,000. How much tariff income will her local authority deem her to have?
   1. £11.50 per week
   2. £15.00 per week
   3. £23.00 per week
   4. £80.00 per week

5. Company X announces a 1:2 rights issue at £4.00. The shares are currently trading at £5.50. What is the theoretical ex-rights price of the shares?
   1. £4.00
   2. £4.50
   3. £5.00
   4. £5.50

Answers

1. A – See R01 Study Text, Chp 5:2
   Grab our taster mock exam paper for CII R01. Click here to download.

2. C – See R03 Study Text, Chp 10
   Grab our taster mock exam paper for CII R03. Click here to download.

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

4. C – See R05 Study Text, Chp 8
   Grab our taster mock exam paper for CII R05. Click here to download.

5. C – See J12 Study Text, Chp 7
   Grab our taster mock exam paper for CII J12. 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!)