Nearly 1 million free-resource-downloads and-counting
Friday Five Focus on Taxation – 21 May – 5 Questions in 5 Minutes

Friday Five Focus on Taxation – 21 May – 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 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

  1. 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.
    1. Her personal savings allowance can be used to reduce the amount of tax payable.
    2. Any chargeable gains are subject to CGT in the normal way.
    3. Her tax liability will be met at source with a 20% tax credit.
    4. Products constructed in this way cannot be held in an ISA wrapper.
  1. On which of the following disposals would the sale proceeds be used as the disposal figure in calculating Capital Gains Tax (CGT)?
    1. On a commercial sale
    2. If an asset is given away
    3. On a disposal to a connected person
    4. On a disposal, not at arm’s length
  1. Nathan has recently invested in the following:
    TypePurchase PriceCurrent Value
    Enterprise Investment Scheme (EIS)£100,000£110,000
    Seed Enterprise Investment Scheme (SEIS)£100,000£120,000
    From the information given you can inform Nathan that:

    1. income tax relief on both investments is at the same rate.
    2. investment can only be carried back with the EIS.
    3. both products invest in companies listed on the FTSE100.
    4. only gains reinvested in the SEIS qualify for a 50% CGT exemption.
  1. A first-time buyer buys a flat in England for £127,950. What Stamp Duty Land Tax (SDLT) will be payable?
    1. £0
    2. £59
    3. £1,279.50
    4. £2,559
  1. 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.
    1. She must inform HMRC before the 30th May.
    2. Once she has informed HMRC, she will be VAT-registered from the 1st May.
    3. If she doesn’t notify HMRC, she may be charged a penalty.
    4. Once she has informed HMRC, she will be VAT-registered from the 1st June.

 

Answers

  1. AB – See R03 Study Text, Chp 10
    Grab our taster mock exam paper for CII R03. Click here to download.
  1. A – See R03 Study Text, Chp 3
    Grab our taster mock exam paper for CII R03. Click here to download.
  1. D – See R03 Study Text, Chp 10
    Grab our taster mock exam paper for CII R03. Click here to download.
  1. A – See R03 Study Text, Chp 7
    Grab our taster mock exam paper for CII R03 Click here to download.
  1. 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?

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

I've just answered this week's Friday Five CII exam questions - can you? #Fri5 Click To Tweet

 

Don't want to miss the Friday Five? Click here to sign up for email notification of new posts.