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.
These questions relate to examinable tax year 2018/19, examinable until 31 August 2019.
- How does a discretionary trust differ from an absolute trust?
- A discretionary trust allows the trustees flexibility over beneficiaries, whereas under an absolute trust the beneficiaries are specifically named
- A discretionary trust allows flexibility over which assets to include, whereas an absolute trust covers the whole of the estate
- A discretionary trust has an open-ended period for distributing assets, but an absolute trust has a fixed time period
- An absolute trust has no interest in possession, but a discretionary trust has an interest in possession
- Where can a “fettered” type of fund invest?
- Only in funds run by the same management group
- In funds from any management group
- Only in funds within the same asset class
- Only in multi-manager funds
- When considering the use of the transferable nil rate band for Inheritance Tax purposes, individuals should be aware that:
- it must be claimed on the second death
- it will not be available if the surviving spouse has re-married
- it can only be increased on second death by a maximum of 200%
- it is only available if the first death occurred after 2007
- In deciding to invest in pensions by means of a SIPP, we need to advise Gordon that: Tick all that apply.
- loans to an employer cannot exceed 50% of the scheme assets.
- assets such as wines and antiques could give rise to unauthorised tax charges.
- the SIPP could be used to buy a commercial property from a “connected person”.
- loans to an employer are permitted.
- 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?
- Within 30 days of making the claim
- When he has completed any required medical treatment
- When he has survived for a stated number of days after diagnosis
- A – See R01 Study Text, Chp 3
Grab our taster mock exam paper for CII R01. Click here to download.
- A – See R02 Study Text, Chp 6:1
Grab our taster mock exam paper for CII R02. Click here to download.
- A – See R03 Study Text, Chp 4
Grab our taster mock exam paper for CII R03. Click here to download.
- BC – See R04 Study Text, Chp 8
Grab our taster mock exam paper for CII R04. Click here to download.
- 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?
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