Friday Five Focus on Taxation – 30 June – 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 2022/23, examinable by the CII until 31 August 2023. They do not relate to tax year 2023/24 which is only examinable by the CII from 1 September 2023.

1. When considering investing in a Venture Capital Trust (VCT), investors should be aware that: Tick all that apply.
   1. Income Tax relief is withdrawn if the shares are disposed of within six years.
   2. the company must not be a close company.
   3. it must be a listed company.
   4. the disposal of VCT shares is potentially liable to CGT at 10%.

2. Donna has made a PET of £350,000 to her nephew to help him start up his own business. She has now asked you to explain when she must register this gift with HMRC. You tell her that:
   1. she must inform HMRC within 28 days of the gift being made.
   2. she must inform HMRC within 90 days of the gift being made.
   3. her nephew must report it within 6 months of receiving the gift.
   4. the gift does not have to be reported to HMRC.

3. In assessing if Janine is employed or self-employed, which of the following might generally indicate that she is employed?
   1. She is highly skilled and works without supervision.
   2. She would expect to be shown how to perform new tasks.
   3. She has a contract to provide services.
   4. She works with many organisations although her role is broadly similar.

4. Natalie is a company director and is paid a flat fee of £20,000. How are her National Insurance contributions calculated?
   1. By averaging her earnings over the last 3 years and applying the appropriate rates on a monthly basis.
   2. By considering her total earnings from the start of the tax year and using the annual limits.
   3. By applying the annual National Insurance limits to each fee she receives.
   4. By deferring the National Insurance calculation until the end of the tax year.

5. Paul and Sarah, both aged 38, are married with two children aged 15 and 17. What is the total amount they can pay into ISAs in the current tax year?
   1. £40,000
   2. £60,000
   3. £78,000
   4. £80,000

Answers

1. BC – See R03 Study Text, Chp 10
   Grab our taster mock exam paper for CII R03. Click here to download.

2. D – See R03 Study Text, Chp 4
   Grab our taster mock exam paper for CII R03. Click here to download.

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

4. B – See R03 Study Text, Chp 2
   Grab our taster mock exam paper for CII R03 Click here to download.

5. C – 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.