Friday Five Focus on Taxation – 1 April – 5 Questions in 5 Minutes
Friday Five Focus on Taxation – 5 Questions in 5 Minutes Every Friday
What’s this all about?
Each week, we ask questions relating to one of these topics: Investments, Taxation, Pensions, Protection, or Regulation. This week, our Friday Five is relevant to Taxation; this is useful as you prepare for the CII’s R03 or AF1 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 2021/22, examinable by the CII until 31 August 2022. They do not relate to tax year 2022/23 which is only examinable by the CII from 1 September 2022.
- Why might Tom, a higher rate taxpayer with an adventurous attitude to risk, want to invest a lump sum in an Enterprise Investment Scheme?
- To have control over the investment
- To gain CGT exemption after a holding period of 3 years
- To receive dividends tax free
- To receive 50% income tax relief on an investment of £200,000
- When considering the use of the transferable nil rate band for Inheritance Tax purposes, individuals should be aware that:
- it must be claimed on the second death.
- it will not be available if the surviving spouse has re-married.
- it can only be increased on second death by a maximum of 200%.
- it is only available if the first death occurred after 2007.
- Under the identification rules used for calculating CGT on shares of the same type and class acquired at different times, how are shares grouped? Tick all that apply.
- Acquisitions within the following 90 days
- Acquisitions on the same day
- Acquisitions arising from a rights issue
- Acquisitions in the share pool
- XYZ plc has made up its accounts for the 16-month period ending 31 January 2022. On what accounting periods, will CT be charged?
- There will be one 16-month long accounting period.
- There will be a twelve-month accounting period to 30 September 2021, and a four-month accounting period to 31 January 2022.
- There will be a four-month accounting period to 31 January 2021 and a twelve-month accounting period to 31 January 2022.
- There will be two accounting periods which will end on 5 April 2021 and 5 April 2022 respectively.
- What strategies might be considered for Henry who is contemplating making lifetime gifts as part of his Inheritance Tax planning? Tick all that apply.
- Make a gift into a discretionary trust of an amount over the nil rate band
- Make outright gifts and hope to survive them by 7 years
- Make a gift into a bare trust as this is a potentially exempt transfer
- Make a gift of his business to his wife to ensure he uses his nil rate band
Answers
- B – See R03 Study Text, Chp 10
Grab our taster mock exam paper for CII R03. Click here to download.
- A – See R03 Study Text, Chp 4
Grab our taster mock exam paper for CII R03. Click here to download.
- BD – See R03 Study Text, Chp 3
Grab our taster mock exam paper for CII R03. Click here to download.
- B – See R03 Study Text, Chp 8
Grab our taster mock exam paper for CII R03 Click here to download.
- BC – See R03 Study Text, Chp 11
Grab our taster mock exam paper for CII R03. 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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