Friday Five – 8 January – 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 2015/16, examinable until 31 August 2016.

1. How does the FCA determine the level of periodic fee to charge an authorised firm?
   1. The periodic fees are based on the length of time the firm has been authorised
   2. Periodic fees are a flat annual subscription
   3. Periodic fees are based on the product areas a firm has permission to advise on and the income the firm receives under each product area
   4. Periodic fees are based on the level of risk attributed to each firm

2. Which of the following is normally associated with liquidity risk?
   1. Derivatives
   2. Cash
   3. Property
   4. Fixed interest

3. Maurice placed a life policy into trust on the 1st January 2013. He died on the 18th October 2015 and a chargeable event occurred on the life policy on the 17th May 2016. The trustees and the beneficiaries of the trust are all UK resident. Who is liable for the resulting tax on the chargeable gain?
   1. Maurice’s executors
   2. Maurice’s trustees
   3. Maurice’s beneficiaries
   4. No-one as the settlor, Maurice, is dead

4. Which of the following rules regarding trivial commutation by a pension member are TRUE? Tick all that apply.
   1. Facility is not available until age 60.
   2. Where a member has more than one pension plan, then all commutations must take place within a 12-month period.
   3. The commutation limit is £30,000 across all schemes.
   4. All of the resulting proceeds will be tax-free.
   5. The values of previously crystallised benefits are taken into account.

5. Carol has had her bid accepted on a house being sold at auction. When can she expect to exchange contracts?
   1. The same day
   2. Within 7 days
   3. Within 14 days
   4. Within 28 days

Answers

1. C – See R01 Study Text, Chp 5:2 Section F3B
   Grab our taster mock exam paper for CII R01. Click here to download.

2. C – See R02 Study Text, Chp 5 Section A6
   Grab our taster mock exam paper for CII R02. Click here to download.

3. B – See R03 Study Text, Chp 10 Section H1
   Grab our taster mock exam paper for CII R03. Click here to download.

4. BCE – See R04 Study Text, Chp 6:1 Section B2
   Grab our taster mock exam paper for CII R04. Click here to download.

5. A – See R07 Study Text, Chp 4 Section C
   Grab our taster mock exam paper for CII R07. 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!)