Friday Five Focus on Taxation – 17 November – 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 2023/24, examinable by the CII until 31 August 2024.
- For this tax year, Sharon has made gross pension contributions of £20,000. She has a share of partnership profits of £100,000 and paid interest of £60,000 on a loan taken out to finance the partnership. How much of the loan interest can be deducted for tax relief purposes?
- £20,000
- £30,000
- £50,000
- £60,000
- As a financial adviser, which of the following individuals would you advise if possible, to pay Class 3 National Insurance contributions? (Select all that apply.)
- Jane, who took early retirement at 50 having established 32 years of NICs.
- Peter, aged 67, with an inadequate NIC record to qualify for a full State pension.
- Hayley, who is moving to Portugal for a year, after selling the UK based business she owned for 10 years.
- Mary, who has an incomplete NIC record after taking the last 2 years off to study.
- Which of these statements regarding local authority and corporate bonds is true?
- Corporate bonds pay interest net of 20% tax.
- Only interest received from a local authority bond is fully taxable as savings income.
- If a local authority bond is bought at issue and held to maturity, the capital should be repaid.
- A corporate bond pays interest for an open-ended period.
- Which of the following statements regarding the annual tax charge for non-domiciled persons is true?
- Paying the annual tax charge on unremitted foreign income and gains allows the individual to remit other income and gains with no further liability.
- An individual can elect to pay tax on their worldwide income and gains for a specific tax year to avoid the annual tax charge.
- The annual tax charge is £30,000 for adults resident in the UK for at least 12 tax years and who claim the remittance basis.
- The charge does not apply to unremitted income and gains of less than £3,000 in any tax year.
- Which of the following would be liable for CGT on their worldwide investment gains? (Select all that apply.)
- Amy – a UK resident and UK domicile.
- Ben – a permanent non-UK resident but UK domiciled.
- Charles, a non-UK domicile and UK resident not using the remittance basis.
- Edward, a non-UK domicile and UK temporary non-resident.
Answers
- C – See R03 Study Text, Chp 1
Grab our taster mock exam paper for CII R03. Click here to download.
- ACD – See R03 Study Text, Chp 2
Grab our taster mock exam paper for CII R03. Click here to download.
- C – See R03 Study Text, Chp 9
Grab our taster mock exam paper for CII R03. Click here to download.
- B – See R03 Study Text, Chp 5
Grab our taster mock exam paper for CII R03 Click here to download.
- ACD – See R03 Study Text, Chp 5
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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