Professional Paraplanner’s TDQ (Training, Development and Qualifications) series, is run in conjunction with key support providers, such as Brand Financial Training, and aims to test your knowledge of the financial services market, as part of your overall training goals and exam techniques.
The following questions, which can also be found in our July/August 2022 issue, relate to examinable Tax year 20/21, examinable by the CII until 31 August 2022.
You will find the answers separately under the Development Zone tab on the Professional Paraplanner website.
QUESTIONS
1. Greater Fool Theory’ refers to:
A. a financial bubble where investors expect prices to carry on rising.
B. a financial situation where there is limited liquidity in the marketplace.
C. a global market correction as a result of increased inflation.
D. a boom in a particular sector of the UK and US economies.
2. With regard to taxation, trustees of an interest in possession trust where the asset is a rental property should be aware that:
A. they will only ever be charged to basic rate tax on the rental income.
B. a higher rate taxpaying beneficiary will not owe any extra tax on rental income.
C. they are entitled to tax relief for the expenses they incur in managing the trust.
D. as trustees, they will be entitled to a personal allowance.
3. Being “fit and proper” to undertake the role is a test that could be used by the Pension Regulator in assessing the appropriateness of the:
A. Scheme Administrator.
B. Scheme Trustee.
C. Employer.
D. Scheme Actuary.
4. Matthew has surrendered an offshore life assurance policy. What rate, or rates, of income tax will he be potentially liable for on any chargeable gain?
A. Higher and/or additional rates only
B. Basic rate only
C. Basic rate, higher rate and/or additional rate
D. Any gain will be free of income tax
5. As a newly authorised investment manager you understand the importance of diversification and how this can help your clients manage investment risk. On a practical basis, diversification can be achieved at the highest level:
A. through accessing different tax wrappers.
B. by using different life offices and providers.
C. spreading equity investments to include overseas.
D. holding investments across the main asset classes.
6. A member firm of a stock exchange executes a trade and acts as principal. This tells us the firm is buying the shares for:
A. their clients.
B. the stock exchange.
C. for their own account.
D. for other member firms.
7. Cora is planning to take out a lifetime mortgage and use the funds released to buy an annuity which does not increase over time and this will be her main source of income. She wants to pay the interest on the mortgage so that the debt does not increase over her lifetime – what interest rate option is likely to be best for her?
A. Tracker rate
B. Discounted rate
C. Capped rate
D. Fixed rate
8. Which of the following types of care provision never needs to be self-funded?
A. Accommodation costs in an NHS hospital
B. Domiciliary care
C. Respite care
D. Residential care in a nursing home
9. James got frustrated at how long it was taking for his local planning authority to process his most recent application. He has therefore built a large extension to his property without planning permission. This is known as:
A. an unpermitted development.
B. a legal development.
C. a development breach.
D. a planning breach.
10. Corporate culture within an organisation is often reflected in a company’s:
A. report and accounts
B. headed paper
C. individual job descriptions
D. values statements and ethics codes
