Friday Five – 7 October – 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 2016/17, examinable until 31 August 2017.

1. How does a Family income benefit policy differ from a standard term assurance policy?
   1. On death of the life assured a series of payments are made instead of a lump sum payment
   2. The policy has multiple lives assured to cover all family members
   3. The aim of the policy is to maintain the family’s lifestyle in the event of the life assured becoming ill
   4. It is a government backed policy with tax concessions

2. What is a Synthetic passive fund?
   1. An Exchange traded fund that uses derivatives to match an index
   2. An index-tracking fund that tracks a specialist index
   3. An Exchange Traded Fund that holds stocks to replicate an index
   4. A socially responsible index-tracking fund

3. Lisa has recently made a £100,000 gain on selling her buy to let home. She is now considering whether to reinvest this in an Enterprise Investment Scheme (EIS). Which of the following would be a benefit to Lisa of doing this?
   1. She can defer the original gain until she disposes of the EIS shares
   2. 50% of the original gain will be exempt from tax
   3. Any subsequent gain would be taxed at a lower rate on disposal
   4. This will reduce the base cost of the EIS shares by the original gain

4. Tom is receiving benefits from his employer’s group income protection scheme. How will these be treated in relation to his personal tax liability?
   1. They will be free of tax if Tom has been a member of the scheme for more than 2 years before receiving the benefits
   2. They will be completely free of any liability for tax
   3. They will be taxed in the same way as normal pay
   4. They will only be taxed if Tom is still receiving them after 12 months

5. ABC Ltd.’s occupational money purchase scheme has a scheme year end of 31 December each year. When must the Chair’s Statement be completed for the scheme year ending 31 December 2016?
   1. 31 January 2017.
   2. 31 March 2017.
   3. 30 June 2017.
   4. 31 July 2017.

Answers

1. A – See R01 Study Text, Chp 2, Section B4A
   Grab our taster mock exam paper for CII R01. Click here to download.

2. A – See R02 Study Text, Chp 8, Section F6
   Grab our taster mock exam paper for CII R02. Click here to download.

3. A – See R03 Study Text, Chp 3, Section F5
   Grab our taster mock exam paper for CII R03. Click here to download.

4. C – See R05 Study Text, Chp 6, Section G
   Grab our taster mock exam paper for CII R05. Click here to download.

5. D – See R08 Study Text, Chp 2, Section C1A
   Grab our taster mock exam paper for CII R08. 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!)