Every month Professional Paraplanner teams up with Brand Financial Training to provide a series of questions from across the CII syllabus to test your knowledge .
Whether you are preparing for your exams, or simply want to keep your knowledge up-to-date, Professional Paraplanner’s Development Zone can help.
These questions relate to examinable Tax year 25/26, examinable by the CII until 31 August 2026.
You will find the answers separately under the Development Zone tab on the Professional Paraplanner website.
We hope you find our Q&A useful in achieving your qualifications.
QUESTIONS
1. Under the General Provisions sourcebook an individual is able to cover temporarily for a senior manager in an emergency without first being approved, where the appointment is for less than
A. 8 weeks.
B. 10 weeks.
C. 12 weeks.
D. 6 months.
2. Alison is considering giving her 21-year-old daughter Darcey £20,000 to invest in a cash ISA. Alison should be aware that (Tick all that apply.)
A. any income of more than £100 per year will be taxed on her until Darcey is 25.
B. any income of any amount will be taxed on Darcey as she is over 18.
C. Darcey can transfer the cash ISA to a stocks and shares ISA at any time.
D. withdrawals can be made at any time without any loss of tax relief.
3. Tamsin made a transfer of £150,000 to a discretionary trust and four years later made a Potentially Exempt Transfer of £325,000. She dies six and a half years later. All other gifts were covered by the annual allowance. Assuming she had used her annual exemptions elsewhere what is the Inheritance Tax liability?
A. Nil
B. £12,000
C. £24,000
D. £60,000
4. Martin is about to retire and looking into how he wishes to take his pensions. He is particularly curious about the lump sum allowance which limits tax-free lump sums payable within his lifetime. He should be aware that the lump sum allowance test will be applied to any amounts taken as a
A. trivial commutation lump sum.
B. standalone lump sum.
C. winding-up lump sum.
D. small pots lump sum.
5. What type of income is disregarded for long term care purposes according to the Care Act 2014?
A. Surrender proceeds of an Insurance (investment) bond.
B. Sale proceeds of a Capital redemption bond.
C. Individual Savings Accounts income.
D. Sale proceeds of a Unit trust.
6. According to modern portfolio theory, which of the following was developed from the random walk theory?
A. Arbitrage pricing theory.
B. The capital asset pricing model.
C. Behavioural finance.
D. The efficient market hypothesis.
7. Sharon has invested in four gilts, the details of which are below. Which gives her the highest flat yield?
Gilt Price Coupon
1 £109.2 4.2%
2 £111.4 4.8%
3 £123.8 5.2%
4 £119.6 5%
A. Gilt 1
B. Gilt 2
C. Gilt 3
D. Gilt 4
8. Who can be appointed under the Adults with Incapacity (Scotland) Act 2000 to manage an individual’s property or financial affairs?
A. Special Attorney.
B. Deputy.
C. Continuing Attorney.
D. Enduring Attorney.
9. Dawn and Dave have taken out a lifetime mortgage with a loan-to-value of 35%. How much of the property insurance will they be obliged to pay?
A. Nil.
B. 25%
C. 75%
D. 100%
10. Peter’s employer has asked him to relocate so that he can work from the new office in York. To sweeten the deal, Peter’s employer has offered to buy Peter’s house. If Peter agrees to this, he should be aware that
A. he will be liable for capital gains tax on the sale.
B. he may be exempt from stamp duty land tax on the purchase of his next home.
C. the employer may be exempt from stamp duty land tax on the purchase.
D. the employer may be liable for corporation tax on the purchase.
