Friday Five Focus on Taxation – 25 February – 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.

1. Johnny recently sold an antique vase making a net chargeable gain of £10,000 after deducting the annual exempt amount and allowable losses. What rate of tax will he be charged if his total taxable income is £20,000?
   1. 28%
   2. 20%
   3. 18%
   4. 10%

2. In which of the following scenarios would a child’s income be treated as if it belonged to their parent or grandparent for tax purposes?
   1. Steven opens a bank account in his son’s name which earns £80 interest.
   2. Stefan, aged 12, earns £30 per week delivering newspapers.
   3. Simon opens a building society account for his grandson which earns £110 interest.
   4. Sarah, aged 16, receives money from her parents and invests it in a cash ISA where it earns £115 interest.

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. Cleo, a first-time buyer buys a flat in England for £127,950 on 1 November 2021. What Stamp Duty Land Tax (SDLT) will be payable?
   1. £0
   2. £59
   3. £1,279.50
   4. £2,559

5. Paul has recently taken out an investment bond and wants to know if he will be subject to income tax on any gain that is made. Which of the following do you need to explain to him is a chargeable event under a non-qualifying life policy? Tick all that apply.
   1. Surrender
   2. Assignment for money’s worth
   3. Assignment between spouses
   4. Payment of a critical illness benefit

Answers

1. D – See R03 Study Text, Chp 1
   Grab our taster mock exam paper for CII R03. Click here to download.

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

5. AB – See R03 Study Text, Chp 10
   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.