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TDQ: Test your knowledge – QUESTIONS

1 August 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 questions relate to examinable Tax year 17/18, examinable by the CII until 31 August 2018. These DO NOT relate to tax year 18/19 as this is not currently examined.



1. When must an intermediary supply a client with initial disclosures and/or Terms of Business?
A. Before offering any advice
B. With any recommendations made
C. With the cancellation notice
D. Within the suitability letter

2. Peter is an ordinary shareholder in Abacus PLC. As a result, he would be:
A. entitled to all of the profit after tax and before preference share dividends have been paid
B. entitled to attend and vote at general company meetings
C. informed on the appointment of directors but unable to elect controlling directors
D. entitled to the residual value of assets after repayment of debts in event of liquidation

3. Julie is considering diversifying her portfolio by investing in gilts. She has asked you to explain the income tax and capital gains tax (CGT) position to her. You tell her that:
A. interest is paid net of 20% tax and losses for CGT are allowable
B. interest is usually paid gross but is taxable and any gains are CGT exempt
C. interest is paid gross but is taxable and only qualifying gilts are CGT free
D. interest is paid net of 20% tax and disposal of a gilt is a chargeable event

4. At A-day Freda opted for Primary Protection. She chose this route because:
A. it was possible the Lifetime allowance could be breached in the future.
B. her fund was in excess of £1.5 million.
C. her fund was less than £1.5 million.
D. she wanted assurance that a Lifetime Allowance charge would never apply.

5. Where a combined life assurance and critical illness policy allows for a buy back of the sum assured on death after the payment of benefits on a critical illness claim, this is typically allowed for what period of time?
A. Up to two years from the date of the critical illness claim
B. Up to three years from the date of diagnosis of the critical illness
C. Up to five years from the payment of the critical illness benefit
D. Up to six months from the end of any treatment for the diagnosed critical illness

6. Calder PLC has issued 4 types of preference share; you would normally expect the shareholders to be ranked according to:
A. the date the investor purchased the shares, with the earliest having higher priority
B. the level of investment, with larger investors having higher priority
C. their priority for payment of dividends and entitlement to capital on winding up
D. the number of preference shareholders compared to ordinary shareholders

7. Which of the following tax benefits do non-domiciled investors specifically gain from investing offshore?
a) The offshore funds are not liable to UK inheritance tax
b) No capital gains tax on sales of reporting funds
c) No income tax on income that is not distributed on a reporting fund
d) No income tax on income that is distributed on a reporting fund

8. Maureen, who lives in England, is assessed as eligible for nursing care funded by the National Health Service. Who is primarily responsible for its payment?
A. Her local authority
B. The Department of Health
C. Her GP’s Clinical Commissioning Group
D. The Strategic Health Authority

9. Why do lenders limit the loan to value on equity release mortgages to a low figure, typically 25% of the value of the property?
A. Because of FCA regulations
B. So that the Consumer Credit Act does not apply to the lending
C. For risk management purposes
D. They have limited funds

10. Which of the following has been established by case law when a lender sells a possessed property?
A. The lender must decide the sale price within 7 days
B. Properties can only be sold by private treaty
C. The lender owes a duty of care to the borrower
D. The lender may not outsource the sale of a possessed property

Need help with your CII exams? For resources including mock exam papers, calculation workbooks, study notes, audio masterclass and e-learning visit Brand Financial Training where you can also download free taster versions.

Professional Paraplanner