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Friday Five – 31 August – 5 Questions in 5 Minutes

Friday Five – 31 August – 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 2018/19, examinable until 31 August 2019.

  1. How does a discretionary trust differ from an absolute trust?
    1. A discretionary trust allows the trustees flexibility over beneficiaries, whereas under an absolute trust the beneficiaries are specifically named
    2. A discretionary trust allows flexibility over which assets to include, whereas an absolute trust covers the whole of the estate
    3. A discretionary trust has an open-ended period for distributing assets, but an absolute trust has a fixed time period
    4. An absolute trust has no interest in possession, but a discretionary trust has an interest in possession
  1. Where can a “fettered” type of fund invest?
    1. Only in funds run by the same management group
    2. In funds from any management group
    3. Only in funds within the same asset class
    4. Only in multi-manager funds
  1. When considering the use of the transferable nil rate band for Inheritance Tax purposes, individuals should be aware that:
    1. it must be claimed on the second death
    2. it will not be available if the surviving spouse has re-married
    3. it can only be increased on second death by a maximum of 200%
    4. it is only available if the first death occurred after 2007
  1. In deciding to invest in pensions by means of a SIPP, we need to advise Gordon that: Tick all that apply.
    1. loans to an employer cannot exceed 50% of the scheme assets.
    2. assets such as wines and antiques could give rise to unauthorised tax charges.
    3. the SIPP could be used to buy a commercial property from a “connected person”.
    4. loans to an employer are permitted.
  1. Stewart has a critical illness policy that has no attached life cover. When will he receive the payment from the policy if he makes a claim on the diagnosis of a critical illness?
    1. Within 30 days of making the claim
    2. Immediately
    3. When he has completed any required medical treatment
    4. When he has survived for a stated number of days after diagnosis

 

Answers

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

 

  1. A – See R02 Study Text, Chp 6:1
    Grab our taster mock exam paper for CII R02. Click here to download.

 

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

 

  1. BC – See R04 Study Text, Chp 8
    Grab our taster mock exam paper for CII R04. Click here to download.

 

  1. D – See R05 Study Text, Chp 7
    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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