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 March 2020 issue, relate to examinable Tax year 19/20, examinable by the CII until 31 August 2020.
1. An investment manager who uses arbitrage pricing theory hopes to:
A. magnify his gains through borrowing
B. identify shares that offer long-term sustainable advantage
C. identify shares that are mispriced in the market
D. prove that average opinion is usually wrong
2. Which of the following individuals would be entitled to National Insurance credits? Tick all that apply.
A. Harriet, aged 19, who is on an approved full-time training course
B. Charlotte who earns £140 a week
C. Matt who is taking statutory paternity leave
D. Archie, aged 55, who has retired
E. Gemma who has left work to consider re-training
3. Caroline died aged 66 with uncrystallised funds valued at £1,600,000. What is the lifetime allowance charge (if any) if benefits over the lifetime allowance are paid as a dependant’s lifetime annuity within two years of her death?
4. Dorian took out a Home Reversion Plan at age 80 when he received a lump sum of £50,000 from the plan provider from his £100,000 value house. He is now aged 102 and still lives in the house valued at £250,000 – approximately how much does he owe the plan provider?
5. Helen has made a chargeable gain of £4,500 on the surrender of her non-qualifying life assurance policy. If her taxable income in 2019/2020 is £40,000 she will be liable for which of the following taxes on the gain?
A. Capital gains tax at 10%
B. Capital gains tax at 20%
C. Income tax at an extra 20%
D. Income tax at an extra 40%
6. Under the Enterprise Act 2002, how long does bankruptcy normally last?
A. 6 months
B. 12 months
C. 3 years
D. 5 years
7. Vanessa has never been married and made a will 20 years ago leaving all her property to the local cat’s home, a registered charity. She has recently lost mental capacity and a Deputy has been appointed to look after her affairs. How does this affect her existing will?
A. The Deputy will need to arrange for a new Statutory Will to be executed
B. It will continue to be valid
C. The Trustees of the cat’s home charity will need to apply to the Court of Protection for the will to be attested
D. It will be immediately revoked
8. An investor holds 1,000 9.581% preference shares with a nominal value of £1. If dividends are paid half yearly, what amount would they receive in each half yearly payment?
9. A new competitor enters the market producing essentially the same product as an existing manufacturer. What type of risk is this an example of?
A. Non-systematic risk
B. Systematic risk
C. Market risk
D. Diversification risk
10. Steve is building a shed in his garden and Simon is building a swimming pool in his. Which of the following is true regarding planning permission?
A. Steve will need planning permission and Simon won’t
B. Steve won’t need planning permission but Simon will
C. Neither Steve or Simon will need planning permission
D. Both will need planning permission