Incorrect Questions Flashcards
16
Linda is concerned about her mother’s care as she has been told she needs to move to a new care home in the local area. How should the current legislation protect her mother in this instance?
A - A reassessment of her needs will ensure appropriate support is given.
B - A revised care plan will come into effect immediately.
C - Her care will be unaffected by the move.
D - Linda will qualify for an enhanced care cost payment as a result of any disruption.
C
17
Nigel has been living in a care home for twelve months and he has agreed that it is time to sell the
family home. His partner currently lives in the property and Nigel wants her to use all of the sale
proceeds to buy a property for her to live in after clearing the remaining mortgage. How is the local
authority likely to view this transaction?
A - It will not include Nigel’s share of the sale proceeds as part of his capital.
B - It will not take any further action unless Nigel is the sole owner of the new property.
C - It will take a charge over the new property to cover the care home fees.
D - It will treat Nigel’s share of the property value as his asset and include it in the financial
means test.
A
Jennifer lives in a residential home in Northern Ireland and is in receipt of a state pension of £105 per week and £90 per week from her private pension. Her savings total £12,000 and the cost of her care is £740 per week. How much will her local authority fund on her behalf?
A £170.10 per week.
B £195.00 per week.
C £545.00 per week.
D £569.90 per week.
D
£740 - £105 - £95 + £24.90 (living expenses) = £569.90
28.
Which of the following is true of Income Support?
A - It is a contributory benefit but is non-taxable.
B - It is a non-contributory benefit and is non-taxable.
C - It is a contributory benefit and is taxable.
D - It is a non-contributory benefit and is taxable.
B
Terry lacks mental capacity and has no one, such as family or friends, to represent him. In these
circumstances, he will be represented by:
A an Independent Mental Capacity Advocate.
B the Court of Protection.
C the Office of the Public Guardian.
D the NHS.
A
37.
Under a long term-care insurance policy, how are any care benefits treated for tax purposes?
A They are always subject to tax at the policyholder’s highest marginal rate of tax.
B They are always tax free.
C They are only tax free when paid to the care provider.
D They are only tax free when paid to the policyholder.
B
39.
Georgio arranged an investment bond for £100,000 when he was a higher-rate tax-payer to fund his
long-term care. He had withdrawn 5% of the original capital each year and encashed the bond after
10 years when the value of the bond was £50,000. How much of the bond was chargeable to tax,
assuming he had a taxable income of £10,000 at the time of encashment?
A None.
B £25,000.
C £50,000.
D £100,000.
C
40.
Which of the following is not a requirement for a deed of variation to be valid?
A All beneficiaries must agree to the variation.
B The deed must be executed within 2 years of the testator’s death.
C The deed must be registered within 3 months of it being signed.
D The deed must not be made for any consideration.
C
41.
For trust property to be disregarded in a care assessment, and where it is not deemed to be
deprivation of assets, the trust must be:
A a discretionary trust.
B a flexible trust.
C a revert to settlor trust.
D an irrevocable trust.
D.
In what circumstances, if any, can negative equity arise under a home reversion plan?
A In all circumstances.
B In no circumstances.
C Only where the plan is set up in joint names.
D Only where the plan provider is not a member of the Equity Release Council.
B
- What rate of tax relief, if any, applies where a client takes out an immediate needs annuity?
A Nil.
B 10%.
C 20%.
D 40%.
A
52.
A key feature of deferred care plans is that they:
A allow individuals to decide how long they wish to pay for their own care.
B are only available on a non-advised basis.
C can only be arranged through the Office of the Public Guardian.
D have no charges.
A
In respect of a lifetime care asset protection bond, what growth assumption usually applies at the
outset?
A 4% per annum.
B 5% per annum.
C 6% per annum.
D 8% per annum.
C.
Which type of cognitive impairment, if any, is usually covered under a long-term care insurance
policy?
A All types.
B None.
C Non-organic only.
D Organic only.
D
Janet has become increasingly infirm. She now requires a stair lift, an electric wheelchair and a wet
room in her home. Which of these, if any, are likely to be provided free of charge?
A None.
B The wheelchair only.
C The wheelchair and the stair lift only.
D The wheelchair, the stair lift and the wet room.
A.
Hardeep, is aged 62, a widower and is retired. His annual income comprises an occupational pension of
£6,000 gross per annum, savings interest of £600, and a small amount of dividend income from his
stocks and shares ISA.
Some years ago, Hardeep decided to invest in the stock market to build up a nest egg for his children, but
he also saw these funds as a potential contingency fund to be made available to pay for long-term care
should this be needed in the future. Hardeep invested his stocks and shares ISA into high risk unit trusts
which did not perform well and left him with little to show for his savings.
Following a stroke two months ago, Hardeep has become frail and will need care in his own home for an
indefinite period. He is speaking to his new financial adviser, Lucy, about utilising his house to fund the
care, and to ascertain what state benefits, if any, he might be entitled to receive. He has heard of the
disability reduction scheme in relation to his Council Tax but is not sure what effect this might have on his
outgoings.
Hardeep wants to keep his home and hopes he will make a sufficient recovery to continue living there in
the long term. He also believes it will increase in value and he wants his children to benefit fully from this
in due course.
Hardeep likes the idea of an equity release scheme to release cash to pay for his care, as he thinks that
this might allow time for his investments to recover. He is researching home reversion plans and the
various types of lifetime mortgage that are available.
Which of the following types of arrangement would be LEAST likely to meet Hardeep’s aspirations?
A Home reversion plan.
B Interest-only lifetime mortgage.
C Lifetime mortgage with interest rolled up.
D Retirement interest-only mortgage.
A.
Hardeep, is aged 62, a widower and is retired. His annual income comprises an occupational pension of
£6,000 gross per annum, savings interest of £600, and a small amount of dividend income from his
stocks and shares ISA.
Some years ago, Hardeep decided to invest in the stock market to build up a nest egg for his children, but
he also saw these funds as a potential contingency fund to be made available to pay for long-term care
should this be needed in the future. Hardeep invested his stocks and shares ISA into high risk unit trusts
which did not perform well and left him with little to show for his savings.
Following a stroke two months ago, Hardeep has become frail and will need care in his own home for an
indefinite period. He is speaking to his new financial adviser, Lucy, about utilising his house to fund the
care, and to ascertain what state benefits, if any, he might be entitled to receive. He has heard of the
disability reduction scheme in relation to his Council Tax but is not sure what effect this might have on his
outgoings.
Hardeep wants to keep his home and hopes he will make a sufficient recovery to continue living there in
the long term. He also believes it will increase in value and he wants his children to benefit fully from this
in due course.
Hardeep likes the idea of an equity release scheme to release cash to pay for his care, as he thinks that
this might allow time for his investments to recover. He is researching home reversion plans and the
various types of lifetime mortgage that are available.
Based on his stated income, if Hardeep purchases an annuity which produces income with an
interest element of £400 pa, which of the following is true regarding the taxation of the annuity?
A The annuity is paid gross and Hardeep will not need to pay any tax on it.
B The annuity is paid gross so Hardeep will need to pay £80 tax through self-assessment.
C The annuity is paid net of basic rate tax and Hardeep will be able to reclaim the tax deducted.
D The annuity is paid net of basic rate tax so Hardeep will have automatically met his tax
liability.
C.
Hardeep, is aged 62, a widower and is retired. His annual income comprises an occupational pension of
£6,000 gross per annum, savings interest of £600, and a small amount of dividend income from his
stocks and shares ISA.
Some years ago, Hardeep decided to invest in the stock market to build up a nest egg for his children, but
he also saw these funds as a potential contingency fund to be made available to pay for long-term care
should this be needed in the future. Hardeep invested his stocks and shares ISA into high risk unit trusts
which did not perform well and left him with little to show for his savings.
Following a stroke two months ago, Hardeep has become frail and will need care in his own home for an
indefinite period. He is speaking to his new financial adviser, Lucy, about utilising his house to fund the
care, and to ascertain what state benefits, if any, he might be entitled to receive. He has heard of the
disability reduction scheme in relation to his Council Tax but is not sure what effect this might have on his
outgoings.
Hardeep wants to keep his home and hopes he will make a sufficient recovery to continue living there in
the long term. He also believes it will increase in value and he wants his children to benefit fully from this
in due course.
Hardeep likes the idea of an equity release scheme to release cash to pay for his care, as he thinks that
this might allow time for his investments to recover. He is researching home reversion plans and the
various types of lifetime mortgage that are available.
Which of the following is true regarding Hardeep’s eligibility for state benefits, if he has been unable
to perform certain Activities of Daily Living unaided since his stroke?
A He is eligible for Attendance Allowance now, provided support is expected to be required for
at least nine months.
B He is eligible for Personal Independence Payment now, provided support is expected to be
required for at least six months.
C He may be eligible for Attendance Allowance in four months’ time.
D He may be eligible for Personal Independence Payment in one month’s time.
D.
Following Ivana’s observation of her widowed mother Anna, now aged 76, during a recent holiday, Ivana
believes that Anna is beginning to suffer mental deterioration.
Ivana does not want to worry Anna, but has made an appointment with Anna’s doctor to seek his opinion.
In the meantime, Ivana wants to see if she can establish a home support infrastructure for Anna in her
own bungalow, as Anna has admitted she is finding it increasingly difficult to look after herself properly,
and Ivana lives with her family 55 miles away. Ivana has also arranged an appointment for her and Anna
to see a financial adviser next week, when they hope to receive his detailed advice for Anna.
Ivana investigates the charges for domiciliary care made by Anna’s local authority, which is as generous
as possible within the standard guidelines. She understands the reasons for the charges and has
confirmed how the value of Anna’s property will be taken into account.
Ivana realises that help in the home for Anna is likely to be a transitional step before she has to move into
residential care.
When considering charging for the type of care Anna currently requires, for the tax year 2019/20 the
local authority must allow her to retain a weekly income of:
A £24.90.
B £57.30.
C £167.25.
D £209.06.
D.
Following Ivana’s observation of her widowed mother Anna, now aged 76, during a recent holiday, Ivana
believes that Anna is beginning to suffer mental deterioration.
Ivana does not want to worry Anna, but has made an appointment with Anna’s doctor to seek his opinion.
In the meantime, Ivana wants to see if she can establish a home support infrastructure for Anna in her
own bungalow, as Anna has admitted she is finding it increasingly difficult to look after herself properly,
and Ivana lives with her family 55 miles away. Ivana has also arranged an appointment for her and Anna
to see a financial adviser next week, when they hope to receive his detailed advice for Anna.
Ivana investigates the charges for domiciliary care made by Anna’s local authority, which is as generous
as possible within the standard guidelines. She understands the reasons for the charges and has
confirmed how the value of Anna’s property will be taken into account.
Ivana realises that help in the home for Anna is likely to be a transitional step before she has to move into
residential care.
Before agreeing to provide any specific advice to Anna, it is most important for the adviser to
establish:
A Anna’s preferred care arrangements.
B Ivana’s willingness to act on Anna’s behalf.
C the degree of Anna’s mental impairment.
D the likely cost of the care fees.
C.
Following Ivana’s observation of her widowed mother Anna, now aged 76, during a recent holiday, Ivana
believes that Anna is beginning to suffer mental deterioration.
Ivana does not want to worry Anna, but has made an appointment with Anna’s doctor to seek his opinion.
In the meantime, Ivana wants to see if she can establish a home support infrastructure for Anna in her
own bungalow, as Anna has admitted she is finding it increasingly difficult to look after herself properly,
and Ivana lives with her family 55 miles away. Ivana has also arranged an appointment for her and Anna
to see a financial adviser next week, when they hope to receive his detailed advice for Anna.
Ivana investigates the charges for domiciliary care made by Anna’s local authority, which is as generous
as possible within the standard guidelines. She understands the reasons for the charges and has
confirmed how the value of Anna’s property will be taken into account.
Ivana realises that help in the home for Anna is likely to be a transitional step before she has to move into
residential care.
Should Anna later need to go into residential care, how will the local authority initially assess her
financial position in relation to the payment of care fees?
A She will be required to fully self-fund from the outset as the value of her bungalow will be
included.
B She will be required to fully self-fund her care costs if her capital exceeds £14,250, excluding
her bungalow.
C She will be required to fully self-fund her care costs if her capital exceeds £23,250, excluding
her bungalow.
D The local authority will always meet the cost of her care in full for at least the first three
months.
C.
A financial adviser is gathering information from Ronan, who has asked her to review the position relating
to his mother, Gloria.
Gloria, a widow aged 77, has assets comprising a property worth £240,000, bank accounts totalling
£14,000, and £20,000 in shares and other investments.
Gloria has not got round to making a will and she has no powers of attorney in place, despite her solicitor
advising her some time ago to make these arrangements before it is too late.
Following a recent stroke, Gloria has suffered physical disablement and loss of mental capacity. As her
only child, Ronan now feels that he needs to manage Gloria’s finances on her behalf. Ronan is divorced
and lives with his two children.
Ronan is aware that will he will benefit from Gloria’s estate if she dies, but he is not sure how much he will
receive. Ronan has substantial assets of his own. He would therefore like to know if he can change who
receives the funds from Gloria’s estate, as he believes this may benefit his children from an inheritance
tax point of view.
Ronan has also stated that in due course advice will be required as to how best to fund Gloria’s care, as it
is likely she will need to enter residential care shortly.
If Gloria died today and Ronan wants his children to inherit the funds from her estate directly, how
could he legally arrange this, if at all?
A Appoint his children as his attorneys, provided they are aged 18 or over.
B Attach a codicil to Gloria’s estate and inform HM Revenue and Customs.
C Complete a deed of variation within two years of Gloria’s death.
D He could not legally arrange this as Gloria does not have a will.
C.
A financial adviser is gathering information from Ronan, who has asked her to review the position relating
to his mother, Gloria.
Gloria, a widow aged 77, has assets comprising a property worth £240,000, bank accounts totalling
£14,000, and £20,000 in shares and other investments.
Gloria has not got round to making a will and she has no powers of attorney in place, despite her solicitor
advising her some time ago to make these arrangements before it is too late.
Following a recent stroke, Gloria has suffered physical disablement and loss of mental capacity. As her
only child, Ronan now feels that he needs to manage Gloria’s finances on her behalf. Ronan is divorced
and lives with his two children.
Ronan is aware that will he will benefit from Gloria’s estate if she dies, but he is not sure how much he will
receive. Ronan has substantial assets of his own. He would therefore like to know if he can change who
receives the funds from Gloria’s estate, as he believes this may benefit his children from an inheritance
tax point of view.
Ronan has also stated that in due course advice will be required as to how best to fund Gloria’s care, as it
is likely she will need to enter residential care shortly.
What should the adviser tell Ronan regarding his request for advice in respect of the funding of
Gloria’s care costs?
A That in the current circumstances, she will insist that a solicitor attends the meeting.
B That she can only provide specific advice to Ronan if Gloria gives her written consent.
C That she can provide specific advice to Gloria, provided that Ronan is present at the time.
D That she is currently unable to provide specific advice to either Gloria or Ronan.
D.
