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TDQ: Test Your Knowledge – Questions

26 October 2018

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 November 2018 issue, relate to examinable Tax year 18/19, examinable by the CII until 31 August 2019.

1. The essence of outcomes-based regulation is about the regulator:
A.         having rules to cover every specific situation
B.         providing tangible standards for firms to achieve
C.         setting out general terms for the types of behaviour they expect to see
D.         making judgments on what might happen in the future

2.         Dave, an additional rate taxpayer has received a dividend distribution of £144 from his OEIC.  Assuming he has utilised his dividend allowance, his tax liability will be:
A.         Nil
B.         £54.86
C.         £60.96
D.         £64.80

3.         Sonya, aged 50, is a self-employed book-keeper and has profits for this tax year of £50,000.  Her total liability to National Insurance will be:
A.         £3,413.34
B.         £3,486.34
C.         £3,566.74
D.         £3,639.74

4.         Norman started flexible drawdown in June 2013. How will he have been affected by the rule changes on 6 April 2015? Tick all that apply.
A.         His arrangement was converted to flexi-access drawdown.
B.         The money purchase annual allowance was triggered from the date of his first withdrawal after converting to flexi-access drawdown.
C.         His position with regards to being able to make money purchase pension contributions without incurring an annual allowance charge improved.
D.         The automatic conversion into flexi-access drawdown was a benefit crystallisation event.

5.         Kevin is employed and receives sick pay from his employer.  This is paid at full pay for six months and then half pay for a further six months. In arranging an income protection policy, he will be able to take out cover based on:
A.         half pay for months 7 – 12 and full pay from month 13
B.         half pay from month 7 only
C.         full pay from month 13 only
D.         full pay from the start of the policy only

6.         Which two types of company security tend to do better than the market as a whole according to a study carried out by Fama and French?  
A.         Large cap and value stocks
B.         Large cap and growth stocks
C.         Small cap and value stocks
D.         Small cap and growth stocks

7.         The price of a warrant is 20p.  The current share price is 90p.  The exercise price is 80p.  What is the warrant’s gearing ratio?
a)         88.89%
b)         112%
c)         225%
d)         450%

8.         What type of assessment does a local authority carry out before someone is able to receive domiciliary care in their own home?
A.         Financial
B.         Needs
C.         Residency
D.         Means

9.         Eric has a Home Income Plan with a “no negative equity” guarantee. What does this prevent on his death?
A.         A shortfall against his estate
B.         The plan continuing with his beneficiaries
C.         The sale of the property
D.         An Inheritance tax charge becoming payable

10.       Sacha has found herself in difficulties with her mortgage payments.  She is already claiming income support.  Which of the following is true regarding the support she could receive?
A.         She may be able to claim help with interest payments on her loan
B.         She may be able to use the support to repay the capital she owes
C.         She may be able to use the support to pay the premium on her endowment policy
D.         She may be able to use the support to pay her pension contributions linked to her mortgage

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