For Professional Paraplanner’s TDQ (Training, Development and Qualifications) series, we have teamed up with key support providers, such as Brand Financial Training, to provide our readers with the very best in training, development and exam support.
This series aims to provide you with valuable advice and guidance materials to help you achieve your training goals, perfect your exam techniques and test your knowledge of the financial services market.
The following 10 questions, which can also be found in our October 2019 issue, relate to examinable Tax year 19/20, examinable by the CII until 31 August 2020.
1. If a client said that all of their current investments were in emerging market funds, what might this indicate to the adviser?
A. That the client was considering retiring abroad
B. That the client has little confidence in the UK stock market
C. That the client was reckless
D. That the client has an adventurous attitude to risk
2. What primary factors determine the rate of interest paid to an investor/depositor? Tick all that apply.
A. The level of risk taken e.g. Gilt versus corporate bond
B. Notice period on deposit accounts
C. The age of the investor / depositor
D. The tax status of the investor / depositor
3. Which of the following individuals would be classed as a UK resident in this tax year? Tick all that apply.
A. George who has lived in the UK for an average of 40 days a year for the last 4 years
B. Yvonne who will be in the UK for 185 days in this tax year
C. Gordon who arrived in the UK on 01/12/17 to take up full time employment
D. Graham who lives in Germany but visits his family in the UK for 2 weeks every 3 months
E. Eleanor’s family home is in Brighton, but due to extensive work commitments this year will have spent 140 days this tax year in Florida
4. Glen McArthur Financial Management’s ‘Aggressive Opportunities Fund’ has a Jensen’s alpha of 1.2%. This tells potential investors that:
A. the manager has outperformed the market
B. the fund has a high level of gearing
C. beta has been adjusted for alpha
D. the standard deviation is the same as beta
5. At age 80, Sidney dies, leaving behind a wife and child. Sidney had uncrystallised benefits. How can the fund pay out any lump sum death benefits?
A. No LTA test needed and can pay out a lump sum subject to 45% tax charge.
B. Benefit crystallisation event so LTA test needed with any excess taxed at 55%.
C. No LTA test needed and lump sum is payable tax free if paid within 2 years.
D. No LTA test needed and lump sum taxable at the recipient’s rate of tax.
6. A mortgage is distinguished from an absolute assignment by a right known as the:
A. law of reassignment
B. equity of redemption
C. repayment of security
D. power of retention
7. A machine needed to produce goods for a company is bought for £5,000. It has a useful life of 6 years and an expected re-sale value then of £500. What is the annual depreciation charge?
A. £916
B. £833
C. £750
D. £417
8. Fred aged 80 took out an equity release mortgage when his wife died 5 years ago. The house has increased in value and he now wishes to release more capital. This is likely to be by what method?
A. Potentially Exempt Transfer
B. Further advance
C. Drawdown
D. Will not be possible
9. Barry suffers from Parkinson’s disease and has been assessed as suffering from cognitive impairment. What additional condition, if any, needs to apply for him to be able to make a claim under his Long-Term Care Insurance policy?
A. He must be unable to carry out one Activity of Daily Living (ADL) as well as the diagnosis of cognitive impairment
B. Barry must be treated as an Elderly Mentally Ill patient
C. A diagnosis of cognitive impairment is sufficient for Barry to make a valid claim
D. He must be unable to carry out three Activities of Daily Living (ADLs)
10. Jo is a first-time buyer in her late 40s. Which housing scheme can offer her a government bonus when she uses her savings to buy her first home?
A. Lifetime ISA
B. FirstBuy scheme
C. Help to Buy ISA
D. Help to Buy equity loan
