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30 April 2020

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 February 2020 issue, relate to examinable Tax year 19/20, examinable by the CII until 31 August 2020.


1. Within the FCA High Level Standards, regulated firms must comply with ‘Common Platform Requirements’. What does this refer to?
A. The systems and controls a firm should have that are appropriate to its business
B. The use of mainstream platform and proprietary systems
C. The use of FCA technology e.g. GABRIEL
D. The level and type of management information required

2. When a portfolio is being arranged to meet more than one objective and a client has different attitudes to risk for each objective, this is known as:
A. mental accounting
B. risk capacity
C. accounting planning
D. mental capacity

3. On which of the following disposals would the sale proceeds be used as the disposal figure in calculating Capital Gains Tax (CGT)?
A. On a commercial sale
B. If an asset is given away
C. On a disposal to a connected person
D. On a disposal, not at arm’s length

4. Graeme has set up an accident, sickness and unemployment insurance policy. Which of the following statements CORRECTLY explains the payment of his premiums and the tax treatment of the benefits?
A. There is tax relief available on the premiums but the benefits are taxable
B. There is no tax relief on the premiums and the benefits are tax free
C. There is no tax relief on the premiums and the benefits are taxable
D. There is tax relief available on the premiums and the benefits are tax free

5. The marketing of new company shares is known as:
A. book building
B. share offering
C. book running
D. share placement

6. Alice has taken out a Home Reversion Plan; she now wishes to rent a room to a lodger to increase her income further. What will she need to do first?
A. She won’t be able to go ahead under the terms of her plan
B. No action needed, she can go ahead and let room without permission
C. Arrange for a legal charge to be drawn up
D. Get permission from the Home Reversion Plan provider as property owner

7. David and Susan are married and own their property as joint tenants. They should be aware that on the first death of either of them the property will:
A. be added to their estate and distributed via their will
B. be added to their estate and distributed via the laws of intestacy
C. automatically pass to the survivor and be covered under the spouse exemption
D. automatically pass to the survivor but only after inheritance tax has been paid

8. Max is a client of yours who has always invested any surplus income in the stockmarket. He now wishes to set up a pension arrangement where he can continue to do this. Which of the following would be suitable for him?
A. A self-invested personal pension.
B. A small self-administered scheme.
C. A retirement annuity contract.
D. A Stakeholder plan or personal pension.

9. Which of the following is part of the Care Quality Commission’s role?
A. Paying compensation if a firm is unable to pay claims made against it
B. Using enforcement powers if standards are not being met
C. Settling complaints about care provided by NHS staff
D. Dealing with complaints about the administration of long term care policies

10. An investment portfolio has a standard deviation of 12% with an annualised return of 13%, this compares to an annual risk-free investment return of 4.1%. What is the Sharpe ratio?
A. 0.74
B. 0.25
C. 1.23
D. 0.42

Professional Paraplanner