Friday Five – 8 May – 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

IMPORTANT!  These questions relate to examinable tax year 2019/20, examinable by the CII until 31 August 2020.  They do not relate to tax year 2020/21 which is only examinable by the CII from 1 September 2020.

1. In which of the following circumstances would the powers granted under an ordinary Power of Attorney NOT be revoked?
   1. In the event of mental incapacity
   2. If the donor leaves the country
   3. In the event of bankruptcy
   4. In the event of death

2. The crux of the Efficient Market Hypothesis (EMH) is that:
   1. security price movements are always clear and predictable.
   2. it should be impossible to achieve higher returns than average market returns through stock selection or market timing.
   3. security prices cannot reflect available information, yet prices rapidly adjust to new information.
   4. an investor can only obtain high returns through skill of buying high-risk investments.

3. Julie bought a ring for £1,000 over 10 years ago and has recently sold it for £8,000. What is the chargeable gain for Capital Gains Tax purposes?
   1. £8,000
   2. £7,000
   3. £3,333
   4. £2,000

4. An employer is setting up a qualifying workplace pension scheme as an occupational defined contribution scheme under a master trust. To be authorised by The Pensions Regulator, master trust schemes must ensure which of the following? Tick all that apply.
   1. The trustees are ‘fit and proper’ to act in their role.
   2. The scheme is financially sustainable.
   3. An Independent Governance Committee is established.
   4. A Governance Advisory Arrangement with a third party is in place.

5. Frank has received the terminal illness benefit payment from his term assurance policy. Which of the following statements CORRECTLY explains the tax treatment of the payment at the time it is made?
   1. There is a liability for inheritance tax.
   2. There is a liability for income tax.
   3. There is no liability for income tax or inheritance tax.
   4. There is a liability for capital gains tax.

Answers

1. B – See R01 Study Text, Chp 3
   Grab our taster mock exam paper for CII R01. Click here to download.

2. B – See R02 Study Text, Chp 3
   Grab our taster mock exam paper for CII R02. Click here to download.

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

4. AB – See R04 Study Text, Chp 5
   Grab our taster mock exam paper for CII R04 Click here to download.

5. C – See R05 Study Text, Chp 4
   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?

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