Friday Five – 31 July 2015 – 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.

Here we go…

Questions

These questions relate to examinable tax year 2014/15, examinable until 31 August 2015.

1. Who carries the compliance responsibility for an appointed representative?
   1. The individual carries their own responsibility
   2. The FCA
   3. The firm’s principal
   4. The introducer

2. A corporate bond fund (with more than 60% of its assets in interest bearing securities) pays interest distributions. What tax is applicable on the amount distributed?
   1. Corporation tax at 20%
   2. Income tax at 20%
   3. 10% savings tax
   4. 10% tax credit

3. Elaine is a basic rate taxpayer. She is also a beneficiary under an Accumulation and Maintenance trust and has received net income of £1,650. Which of the following is correct regarding this income?
   1. Elaine is deemed to have received gross income of £3,000
   2. The settlor of the trust will reclaim any tax on Elaine’s behalf
   3. She has no further liability but neither can she reclaim any tax
   4. She will have a further liability less the amount taxed at source

4. Which of the following would be seen as an advantage in drawing benefits through a Phased Retirement plan?
   1. Full tax-free cash at the outset.
   2. Funds can be used to provide unlimited withdrawal amounts.
   3. Potential for higher tax free death benefits.
   4. Mortality Drag.

5. Susan bought £1000 nominal value of Treasury 7% 2014. What interest payment can she normally expect to receive?
   1. £70 every year
   2. £5.80 every month
   3. £35 every 6 months
   4. £23.33 quarterly

Answers

1. C – See R01 Study Text, Chp 5:2 Section H3A
   Grab our taster mock exam paper for CII R01. Click here to download.

2. B – See R02 Study Text, Chp 6:1 Section C8
   Grab out taster mock exam paper for CII R02. Click here to download.

3. A – See R03 Study Text, Chp 1 Section K5B
   Grab our taster mock exam paper for CII R03. Click here to download.

4. C – See R04 Study Text, Chp 6:2 Section E2
   Grab our taster mock exam paper for CII R04. Click here to download.

5. C – See J12 Study Text, Chp 2 Section C1A
   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!)