Friday Five Focus on Taxation – 21 May – 5 Questions in 5 Minutes
Last updated on May 22nd, 2021 at 4:04 pm
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 2020/21, examinable by the CII until 31 August 2021. They do not relate to tax year 2021/22 which is only examinable by the CII from 1 September 2021
- Maureen, a basic rate taxpayer, has just invested £50,000 into a guaranteed income bond that has been constructed by the provider using a medium-term note. She should be aware that? Tick all that apply.
- Her personal savings allowance can be used to reduce the amount of tax payable.
- Any chargeable gains are subject to CGT in the normal way.
- Her tax liability will be met at source with a 20% tax credit.
- Products constructed in this way cannot be held in an ISA wrapper.
- On which of the following disposals would the sale proceeds be used as the disposal figure in calculating Capital Gains Tax (CGT)?
- On a commercial sale
- If an asset is given away
- On a disposal to a connected person
- On a disposal, not at arm’s length
- Nathan has recently invested in the following:
Type Purchase Price Current Value Enterprise Investment Scheme (EIS) £100,000 £110,000 Seed Enterprise Investment Scheme (SEIS) £100,000 £120,000 - income tax relief on both investments is at the same rate.
- investment can only be carried back with the EIS.
- both products invest in companies listed on the FTSE100.
- only gains reinvested in the SEIS qualify for a 50% CGT exemption.
- A first-time buyer buys a flat in England for £127,950. What Stamp Duty Land Tax (SDLT) will be payable?
- £0
- £59
- £1,279.50
- £2,559
- Sarah is NOT registered for VAT but realises on the 1st May 2021 that sales for May will be in the region of £87,000. Which of the following is true regarding VAT registration? Tick all that apply.
- She must inform HMRC before the 30th May.
- Once she has informed HMRC, she will be VAT-registered from the 1st May.
- If she doesn’t notify HMRC, she may be charged a penalty.
- Once she has informed HMRC, she will be VAT-registered from the 1st June.
Answers
- AB – 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 3
Grab our taster mock exam paper for CII R03. Click here to download.
- D – 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 7
Grab our taster mock exam paper for CII R03 Click here to download.
- ABC – See R03 Study Text, Chp 8
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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