The CII Financial Assess training package tests your knowledge of key financial topics
Question 1
How is the present value of rent calculated for stamp duty land tax purposes?
A. By multiplying the annual rent by the number of years of the lease and then applying a discount factor
B. By multiplying the annual rent by the number of years of the lease
C. By multiplying the monthly rent by the number of years of the lease and then applying a discount factor
D. By multiplying the monthly rent by the number of years of the lease
Question 2
Jill will buy £970 of Rolls-Royce PLC shares using a stock transfer form. What stamp duty will she pay?
A. £4.85
B. £5
C. £9.70
D. Nil
Question 3
Investment shortfall risk is the risk that an investment return will not:
A. Achieve the investment goal
B. At least match overall market performance
C. At least match the amount of the original investment, allowing for inflation
D. Represent a net profit
Question 4
An investor receives a nominal return of 6% a year. If inflation is 2%, what is the investor's real return?
A. -4%
B. 4%
C. 6%
D. 8%
Question 5
Which pension type is available as a death benefit from a defined benefit (DB) scheme?
A. Flexi-access drawdown plan
B. Lifetime annuity
C. Scheme pension
D. Short-term annuity
Question 6
Who has the power to hold a defined benefit scheme's assets?
A. The scheme actuary
B. The scheme administrator
C. The scheme trustees
D. The sponsoring employer
Question 7
What is the weekly amount of the maximum single-tier State pension in 2020/21?
A. £129.20
B. £134.25
C. £168.60
D. £175.20
Question 8
In 2020/21, what is the basic rate of income tax on dividends paid to an individual?
A. 20%
B. 32.5%
C. 40%
D. 7.5%
Question 9
Which of the following is likely to be the most liquid structure through which to invest in property?
A. Authorised property unit trusts (APUTs)
B. Joint ventures
C. Limited partnerships
D. Real estate investment trusts (REITs)
Question 10
Dividends from a property authorised investment fund (PAIF) are paid:
A. Gross
B. Net of 20%
C. Net of 32.5%
D. Net of 7.5%
Answers
1A. The present value is calculated by multiplying the annual rent by the number of years of the lease and then applying a discount factor.
2D. Stamp duty transactions of less than £1,000 are exempt.
3A. Shortfall risk means that the required funds will not be generated.
4B. The real return is nominal rate (6%) - inflation rate (2%) = +4%.
5C. DB schemes may only offer scheme pensions to their members' dependants.
6C. The trustees have the power to hold the scheme assets subject to the trust deed and scheme rules.
7D. This is equivalent to around £9,100 a year.
8D. Dividend tax credits were abolished from 2016/2017. Since then, the rate of tax payable on dividends by a basic rate taxpayer is 7.5%, but no tax is paid by pension funds.
9D. REITs and other quoted property companies can be transacted on the London Stock Exchange, as per any FTSE equity.
10A. Dividends from a PAIF are paid gross.
Your score
1–3 Poor
4-6 Good
7-8 Very good
9-10 Excellent
