Friday Five – 8 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.

Questions

These questions relate to examinable tax year 2018/19, examinable until 31 August 2019.

1. Which of the following statements regarding ‘structured’ and ‘unstructured’ loans is incorrect?
   1. Structured loans are viewed as lower risk than unstructured
   2. Unstructured loans tend to be for larger amounts
   3. The interest rate applied on an unstructured loan is usually linked to a base rate
   4. There is often no collateral to back up a structured loan

2. As a financial adviser, which of the following individuals would you advise if possible, to pay Class 3 National Insurance Contributions? Tick all that apply.
   1. Jane, who took early retirement at 50 having established 32 years of NICs
   2. Peter, aged 67, with an inadequate NIC record to qualify for a full State pension
   3. Hayley, who is moving to Portugal for a year, after selling the UK based business she owned for 10 years
   4. Mary, who has an incomplete NIC record after taking the last 2 years off to study

3. Which of the following lump-sum death benefits is only payable from a scheme pension (ie crystallised funds) that arises from a defined benefit scheme?
   1. A defined benefits lump-sum death benefit.
   2. A pension protection lump sum death benefit.
   3. An annuity protection lump sum.
   4. An uncrystallised lump sum.

4. Lakeside Trading Ltd, provide their employees with sick pay if they are off work through illness or accident. If an employee receives these benefits, which of the following taxes, if any, will they be liable for on the money they receive?
   1. None – the money is free from liability to tax
   2. National Insurance
   3. Income Tax
   4. Income Tax and National Insurance

5. Harold has established a blind trust. The trustees hand over a statement of income and capital gains to the beneficiaries at the end of the tax year without identifying assets. The beneficiaries are then taxed at their normal rates. What type of trust is a blind trust?
   1. Secret
   2. Discretionary
   3. Bare
   4. Interest in possession

Answers

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

2. ACD – See R03 Study Text, Chp 2
   Grab our taster mock exam paper for CII R03. Click here to download.

3. B – See R04 Study Text, Chp 6.1
   Grab our taster mock exam paper for CII R04. Click here to download.

4. D – See R05 Study Text, Chp 2
   Grab our taster mock exam paper for CII R05. Click here to download.

5. C – See J10 Study Text, Chp 4
   Grab our taster mock exam paper for CII J10. 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?

If you found this quiz useful for your CII exam revision, please do share it with your colleagues.