Cii 22/23 mock

Question 1

What counts as a director having a material interest in a company?

Answer 1

• Solely (or with family)
• Owning (or controlling)
• Directly (or indirectly)
• At least 5% of capital

Think material interest has the loosest requirements

Question 2

Do you get top-slicing relief on offshore bonds?

Answer 2

Yes

Question 3

Is income tax for employees calculated before or after NICs

Answer 3

Before (i.e. it isn’t deductible for income tax purposes)

Question 4

Is corporation tax for employees calculated before or after NICs?

Answer 4

After (i.e. it is deductible for corporation tax purposes)

Question 5

What types of investments are liable to SD/SDRT?

Answer 5

• Stocks (OEICs included)
• Shares
• Unit Trusts

Question 6

Heather (both mother and father are UK Domiciled) lived & worked in Mexico where she owns a flat for the last 10 years. She visits her mother for a month in the UK.

How is she classed with regards to Domicile and Residency?

Answer 6

Domiciled but non-resident.

I think generally if you’re initially domiciled (e.g. UK parents) then you don’t really become un-domiciled unless you elect to.

Question 7

With regards to the Basic Rate Tax Band extension after gift aid, is it calculated automatically or by self-assessment?

Answer 7

Self-assessment (i.e. it must be claimed)

Question 8

What types of transactions increase your Basic Rate Tax Band?

Answer 8

Relief at source
Gift aid

Question 9

Of the following investments, what is the position of carrying losses forward:
- Qualifying corporate bonds
- With-profits assurance bond held by the initiator
- UT invested in gilts alone

Answer 9

• No CGT on qualifying corporate bonds
• No CGT on investment bonds
• UT can carry forward losses as it is chargeable to CGT

Question 10

What is the usual VAT period?

Answer 10

Quarterly

Question 11

What is the deadline for claiming holdover relief?

Answer 11

4 years

Question 12

Does holdover relief need to be claimed, and if so by who?

Answer 12

Yes by both the donee and donor

Question 13

Can holdover relief be claimed on assets transferred into trust?

Answer 13

Yes

Question 14

Does the number of trusts created by a settlor infringe on the CGT allowance?

Answer 14

Yes

Question 15

How does an ISA get inherited?

Answer 15

The annual allowance for the donee is increased to the full value of the donor’s ISA once probate is granted

Question 16

Of the full and partial withdrawals, which does the 5% tax deferred apply to?

Answer 16

Partial

Question 17

Can onshore bonds be qualifying?

Answer 17

Yes

Question 18

Can offshore bonds be qualifying?

Answer 18

No

Question 19

What product to PIBs most closely resemble?

Answer 19

Qualifying corporate bonds

Question 20

Who is liable if a PET becomes chargeable?

Answer 20

The beneficiary

Question 21

How much must you donate to charity from your estate to qualify for the 36% inheritance tax rate?

Answer 21

10% of the remaining estate after NRBs

Question 22

Alex earns £120,000 employed income and £2,000 savings income. What is his Personal Allowance?

Answer 22

£1,570

£12,570 - ((£120,000 + £2,000) - £100,000)/2
- i.e. savings income counts towards the tapering down of your PA

Question 23

If you earn £10,000 self employed income over 40 weeks, what is your Class 2 NIC liability?

Answer 23

£163.80

Doesn’t matter if it’s 40 weeks you need to pay £163.80 as soon as your income exceeds £6,725

Question 24

Of Class 1-4 NICs, which count towards your State Pension?

Answer 24

All apart from 4

Question 25

What is the CGT position on inheriting shares with unrealised gains?

Answer 25

The gain is realised and tax may be due

Question 26

Adam is a HRT who realises a £50,000 gain on the sale of some assets. 20% would usually be due, but he invests this into an EIS for the reinvestment relief. Eventually, Adam sells his EIS but at this point he is a BRT. What CGT is due?

Answer 26

Still 20% it literally just defers the gain but the rate is still due at whatever it was when you initially invested it

• Just brushing it under the rug

Question 27

If Jane transfers her VCT which has been in place for 2 years to her husband Nick, would the income tax be clawed back?

Answer 27

No