Friday Five – 6 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.
These questions relate to examinable tax year 2019/20, examinable until 31 August 2020.
- What is the definition of a beneficiary who has a contingent interest under a trust?
- A beneficiary who is entitled to income from trust assets, but not the capital
- A beneficiary who cannot exercise control over the trust assets
- A beneficiary whose entitlement is dependent on something else happening first
- A beneficiary who shares entitlement to trust assets with other beneficiaries
- Your client’s stockbroker has recommended to them that they borrow some money to take advantage of a potentially lucrative investment opportunity. What is this an example of?
- Bail-in risk
- Frankie is looking to mitigate her Inheritance Tax situation and has made a start by using her annual exemption for this tax year. She should be aware that: Tick all that apply.
- she can use her annual exemption from last tax year if she hasn’t done so already
- any gift she makes now, and in the future, will qualify for taper relief
- if she makes a gift, it will be effective for IHT even if she retains a benefit from it
- a non-exempt gift into a discretionary trust will be a chargeable lifetime transfer (CLT)
- Nigel, age 66, had been in flexi-access drawdown for 18 months when he died suddenly in June 2019. The death benefit is £50,000. If his widow, Debbie, decides to take this as a lump sum, what is the net amount she will receive? Debbie is a higher rate taxpayer and Nigel was a basic rate taxpayer in the year of death.
- Karen has a combined life assurance and critical illness policy. What will happen to the sum assured on death if she makes a claim on the diagnosis of a critical illness?
- It will continue at the original amount for a maximum of five years.
- It will continue at half the original amount.
- It will only continue to exist if Karen survives for a minimum of two years.
- It will not exist as the policy has paid out an accelerated death payment.
- C – See R01 Study Text, Chp 3
Grab our taster mock exam paper for CII R01. Click here to download.
- D – See R02 Study Text, Chp 5
Grab our taster mock exam paper for CII R02. Click here to download.
- AD – See R03 Study Text, Chp 4
Grab our taster mock exam paper for CII R03. Click here to download.
- D – See R04 Study Text, Chp 2:2
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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