UK Financial Regulation Exam 2023/24
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Questions and Answers

Which costs can be deducted to reduce the amount of a taxable gain?

  • Only costs related to acquisition
  • Costs of acquisition, enhancement and disposal (correct)
  • Only maintenance costs
  • Only enhancement and maintenance costs

    • What is the percentage of Stamp Duty Reserve Tax (SDRT) on the market value of shares upon purchase?

  • 1.5%
  • 1%
  • 0.25%
  • 0.5% (correct)

    • Which types of contributions does a self-employed person typically pay?

  • Class 1 and Class 3 contributions
  • Only Class 2 contributions
  • Class 1 and Class 2 contributions
  • Class 2 and Class 4 contributions (correct)

    • What does Maternity Allowance provide for working women?

    <p>Help for pregnant women who cannot claim Statutory Maternity Pay (SMP)</p> Signup and view all the answers

    What is the fixed rate that can apply to chargeable lifetime transfers exceeding the nil rate band?

    <p>20%</p> Signup and view all the answers

    Which description correctly defines income support eligibility criteria?

    <p>Targeted at those with a lower income working less than 16 hours per week</p> Signup and view all the answers

    What is a characteristic of child benefit eligibility?

    <p>Only payable once the child is born</p> Signup and view all the answers

    Which of the following is true regarding Class 3 contributions?

    <p>They are considered voluntary contributions</p> Signup and view all the answers

    What is a primary consideration when deciding on investments?

    <p>Accessibility, existing holdings, and tax position</p> Signup and view all the answers

    What is the current tax rate applied to the underlying funds of life offices?

    <p>20%</p> Signup and view all the answers

    Which of the following is NOT a benefit of explaining product features to clients?

    <p>It guarantees a sale</p> Signup and view all the answers

    What is the open-market option primarily used for at retirement?

    <p>To purchase the most advantageous annuity or benefit structure</p> Signup and view all the answers

    Which statement correctly reflects the priorities for young families regarding financial protection?

    <p>Protection for dependents against death or illness of an income provider</p> Signup and view all the answers

    What aspect should the adviser focus on after explaining features and benefits of a product?

    <p>Addressing client questions to confirm understanding</p> Signup and view all the answers

    Which factor can NOT be anticipated when planning investments?

    <p>Future changes in circumstances</p> Signup and view all the answers

    What is a primary goal of the open-market option at retirement?

    <p>To find the most beneficial annuity or benefit structure</p> Signup and view all the answers

    What is the main criterion that determines an individual's automatic residency in the UK?

    <p>Being present for at least 183 days in a tax year</p> Signup and view all the answers

    Which of the following statements regarding redundancy payments is true?

    <p>If a redundancy payment exceeds £30,000, it is liable to be taxed</p> Signup and view all the answers

    Which of the following capital gains tax (CGT) exemptions is correct?

    <p>Principal residences are exempt from CGT</p> Signup and view all the answers

    Who is potentially liable for Capital Gains Tax (CGT) on gains?

    <p>Investors in unit trusts</p> Signup and view all the answers

    What is true regarding tax deductions at source for dividend payments?

    <p>No tax is deducted at source on dividend payments</p> Signup and view all the answers

    What affects the liability for Capital Gains Tax when selling a second property?

    <p>The property being considered a principal residence</p> Signup and view all the answers

    What is the purpose of capital allowances for companies?

    <p>To reduce the corporation tax payable</p> Signup and view all the answers

    What is the threshold for tax liability on redundancy payments?

    <p>£30,000</p> Signup and view all the answers

    What is the advantage of explaining both features and benefits when making a product presentation to a client?

    <p>It enables the client to better understand how this product will meet their needs.</p> Signup and view all the answers

    Which of the following financial needs is usually the priority for young families?

    <p>Financial protection.</p> Signup and view all the answers

    Of the information below, gathered in respect of Alice, which item represents a 'hard' fact?

    <p>Her savings account balance has fallen to £5,000.</p> Signup and view all the answers

    In the context of a trust fund setup by Martin, what is correct regarding the trustees?

    <p>Both trustees must agree, before exercising their discretionary powers.</p> Signup and view all the answers

    What legal authority does Stella gain by being named as an executor under a will?

    <p>Probate has been granted.</p> Signup and view all the answers

    Any loss made by a partnership is usually the responsibility of which entity?

    <p>The responsibility of the partners.</p> Signup and view all the answers

    Which item does NOT typically represent a consideration when discussing financial protection for young families?

    <p>Retirement savings plans.</p> Signup and view all the answers

    Which organization is responsible for ensuring fair competition in UK markets?

    <p>Competitions and Markets Authority</p> Signup and view all the answers

    What is one of the outcomes for retail consumers regarding their fair treatment?

    <p>Accessing products, switching product or provider, or making a claim.</p> Signup and view all the answers

    Which principle does not apply specifically to the role of a senior management function?

    <p>Disclosing information to the FCA or PRA.</p> Signup and view all the answers

    What is required of a firm's systems and controls according to the FCA?

    <p>They must be regularly reviewed.</p> Signup and view all the answers

    Individuals performing which roles are required to undergo individual vetting by the FCA/PRA?

    <p>Those in significant harm functions.</p> Signup and view all the answers

    Which of the following is considered a form of market abuse?

    <p>Insider dealing.</p> Signup and view all the answers

    Which of the following is NOT one of the Financial Conduct Authority's Principles for Businesses?

    <p>To maintain customer confidentiality.</p> Signup and view all the answers

    Which body has oversight for the prudential regulation of financial firms?

    <p>Prudential Regulation Authority</p> Signup and view all the answers

    What is the primary aim of the Financial Conduct Authority regarding consumer protection?

    <p>To ensure customers are treated fairly.</p> Signup and view all the answers

    What does a dividend cover of 4 indicate about a company's profit distribution?

    <p>Profits are sufficient to pay dividends four times over.</p> Signup and view all the answers

    Which of the following statements is true regarding the issuance of shares?

    <p>Additional shares must be offered to existing shareholders via a rights issue.</p> Signup and view all the answers

    What tax implications arise from dividend income exceeding the dividend allowance?

    <p>Tax must be paid if it exceeds £1,000 for the fiscal year.</p> Signup and view all the answers

    How are PIBS related to financial institutions?

    <p>PIBS are financial instruments issued by building societies.</p> Signup and view all the answers

    Which statement best describes the nature of debentures versus loan stocks?

    <p>Debentures are secured against company assets whereas loan stocks are generally not.</p> Signup and view all the answers

    What may happen to a firm if the FCA finds a contravention of its rules?

    <p>The firm may have one of its regulated activities removed or restricted.</p> Signup and view all the answers

    What is required for Christo to undertake a certified role for a bank function?

    <p>Christo must be deemed fit and proper by his firm.</p> Signup and view all the answers

    In promoting competition, which of the following is not an action the FCA takes?

    <p>Offering 'light touch' regulation for firms with poor performance.</p> Signup and view all the answers

    What is a specific requirement for direct offer financial promotions by the FCA?

    <p>The promotion must include the name of the FCA.</p> Signup and view all the answers

    Which warning must be included in advertisements that relate to past investment performance?

    <p>Past performance is not necessarily a reliable indicator of future performance.</p> Signup and view all the answers

    What must a regulated firm do once an employee is deemed competent?

    <p>The firm must have arrangements in place to maintain that competence.</p> Signup and view all the answers

    What does the FCA use to ensure no single firm dominates the market?

    <p>Monitoring market share and competition levels.</p> Signup and view all the answers

    Which statement is true regarding the approval process for Christo's certified role?

    <p>Approval must be obtained from the Prudential Regulation Authority.</p> Signup and view all the answers

    What should financial promotions ensure regarding the past performance of investments?

    <p>They make no guarantees about future investment performance.</p> Signup and view all the answers

    What is the primary purpose of the FCA's actions in regulating competition?

    <p>To ensure customer interests are protected.</p> Signup and view all the answers

    Which method is primarily used for achieving continuing professional development?

    <p>In-house tutorials</p> Signup and view all the answers

    Under what condition may Simon provide advice on regulated products?

    <p>He may do so, provided he acts under close supervision</p> Signup and view all the answers

    For how long must training and competence records be retained after an individual stops conducting regulated activities?

    <p>Seven years</p> Signup and view all the answers

    Which of the following is a true statement regarding Training and Competence rules?

    <p>Firms must monitor the continuing competence of their employees</p> Signup and view all the answers

    What additional document is required to be provided to clients when advising on designated investment business?

    <p>A suitability letter</p> Signup and view all the answers

    Why is Simon’s loan subject to FCA regulation under MCOB?

    <p>It is a buy-to-let loan for investment purposes</p> Signup and view all the answers

    Which document must Ben provide to detail the APRC to his clients?

    <p>A European Standardised Information Sheet (ESIS)</p> Signup and view all the answers

    Which of the following methods is NOT typically associated with effective continuing professional development?

    <p>Taking compulsory leave for rest</p> Signup and view all the answers

    What is the maximum allowable time frame for firms to ensure new entrants attain industry competence?

    <p>Within 12 months of employment</p> Signup and view all the answers

    If a financial adviser has not passed the appropriate approved examination, what is a potential consequence?

    <p>They must refer clients to another adviser for advice</p> Signup and view all the answers

    Study Notes

    Examination Details

    • Examination topic: UK Financial Regulation (UKFR)
    • Length of examination: 2 hours
    • Number of questions: 100
    • Each question carries one mark
    • Basic silent desktop calculators with + − × % and memory functions are allowed
    • Scientific, programmable or calculators with any additional functions are not allowed
    • Taxation tables are provided.
    • No other books, papers or aids may be used.
    • Taxation rates for the year 2023/24 apply.

    Candidate Instructions

    • Do not open the question paper until instructed to do so.
    • Answer all questions.

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    Related Documents

    CeMAP1 Paper A 2024 PDF

    Description

    Prepare for the UK Financial Regulation examination with this 2-hour, 100-question quiz focusing on taxation rates and regulations for the year 2023/24. Ensure you understand the guidelines regarding the use of calculators and other materials before you begin. Test your knowledge and readiness for the actual exam.

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