Advice Matters - Vol 4 Edition 4

Complete this short quiz to test your knowledge on the latest edition of Advice Matters.

Answer all the questions and hit the done button to see how you have performed. If you have any wrong it is certainly worth revisiting the relevant article from this edition.

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* 1. What is the main theme of the first article on Brexit and what you should be taking away after reading it?

A guide on how to prepare your firm for Brexit, including a checklist and timetable of key steps to take to be ready for a post-EU trading future.

An in-depth analysis of the voting during the Brexit referendum looking at different geographical regions, age of voters and ethnic groups, as well as how different industry sectors voted

An overview of the probable impacts of Brexit on customers, firms and regulators during and after the Transition Period and how different arrangements that currently function across the EU/UK border will be affected

How to explain to customers what will happen post-Transition Period and an explanation of all the tangible measures the government has put in place to guarantee barrier-free trading with our good friends in Europe

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* 2. On what date did the UK actually leave the EU?

1 January 2020

23 June 2016

31 December 2019

31 January 2020

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* 3. On what date will the transition period come to an end?

1 January 2021

31 December 2020

31 January 2021

Not as yet agreed. The Commission will decide the date.

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* 4. Passporting:

entitles UK employees in financial services to travel under the HM Government’s full protection to and from foreign countries.

is the means by which firms outside EEA are allowed to carry on financial services activities without their needing to be fully authorised in the UK.

is the means by which UK firms are allowed to carry on financial services activities anywhere in the world as long they have been fully authorised in the UK.

is the means by which UK firms can carry out financial services activities without their needing to be fully authorised in an EU member state.

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* 5. Equivalence is:

a set of regulatory rules or regime in one jurisdiction that are almost the same as that in another jurisdiction.

a set of regulatory rules or regime in one jurisdiction which can be substituted into another jurisdiction without formal approval.

where country A accepts that country B’s rules are as strict as its own and so allows country B’s firms to carry out business on Country A’s territory.

where country A imposes its own strict rules on Country B before its firms may carry out its business on country A’s territory.

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* 6. An FTA is a:

Foreign Trade Association.

Formal Termination Agreement.

Free Trade Agreement.

Fully Transparent Arrangement.

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* 7. A third country:

is a member of the EU and party to an agreement between two other countries.

is a member of the EU, but not party to an agreement between two other countries.

is not a member of the EU, but party to an agreement between two other countries.

is not a member of the EU, nor party to an agreement between two other countries.

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* 8. According to the second article, how have the recent receipts of Inheritance Tax performed over the last 2-3 years?

The receipts have gradually decreased over the last three years by 3%.

The receipts have plateaued after reaching a high point in 2015/16.

The receipts have reached their highest level ever in 2018/19.

The receipts have remained roughly constant at £4.5bn a year since 2015/16.

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* 9. What impact do 80% of the people interviewed by The Private Office (a financial planning firm) think Covid-19 will have on Inheritance Tax?

Inheritance Tax will decrease as more deaths due to Covid-19 will mean more income overall, and the government will seek to return some money to those receiving an inheritance in order to stimulate the economy.

Inheritance Tax will increase to pay for the coronavirus bailout.

No impact – the two things are not related.

Those who died of Covid-19 will be exempt from Inheritance Tax.

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* 10. What are the three ways your client can minimise Inheritance Tax?

Hide their money and assets in offshore bank accounts.

Place their assets in a trust.

Spend their money.

Use Inheritance Tax reliefs.

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* 11. Which three of the following are exemptions provided by the HMRC for Inheritance Tax?

Annual exemption - £10,000 per tax year per donor

Charity exemption – unlimited provided the body is a UK registered charity

Regular gifts out of income (provided they are regular, out of taxed income and do not diminish the donors standard of living)

Small gifts exemption – up to £250 per tax year per donee

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* 12. Which three of the following are Inheritance Tax reliefs provided by the HMRC for Inheritance Tax?

Agricultural Relief

Business Relief

Quick Succession Relief

Second Home Relief

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* 13. Which of the following is a criterion used to decide whether Business Relief will apply to the transfer of a business asset following the death of an individual?

It must be a shareholding in either an unquoted or an AIM company.

It must be subject to a binding contract for sale following death.

It must have been owned by the individual or business for at least two years.

It must have been personally owned by the deceased.

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* 14. Which of the following assets do not qualify for Business Relief?

Assets held for five years that have not been used in the business for the past 18 months

Assets not required for future use in the business

Interests in a partnership

Shareholdings in AIM companies

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* 15. This is the simplest type of trust and is set up for named individuals, often minors, and gives them a right to both the income and capital of the trust. Once the beneficiary reaches the age of 18, they can demand the trust assets are passed to them, even if the settlor does not wish this. What is this type of trust called?

Absolute trust

Discretionary trust

Gift trust

Loan trust

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* 16. Roland, having made no previous transfers, gifts £800,000 in cash to a discretionary trust for his son, William. What rate(s) of Inheritance Tax are applicable at the time of the gift?

0% and 20%

0% and 40%

0% only

20% only

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* 17. What is the main message of the third article on the FCA and organisational culture and what you should be taking away after reading it?

Organisational culture is the current buzz term in financial services regulation and you need to know how to explain it to shareholders, suppliers, colleagues and customers.

The FCA remains resolute in its aim to ensure that healthy organisation cultures prevail in the UK’s financial services sector and how you should go about identifying your firm’s culture.

The FCA’s rules and regulations on organisational culture, including its template for “A Good Business Culture” that lays out the guidelines for achieving good business culture within a six-month time span.

Your part in organisational culture and how you can drive it forward and mould it so that it mirrors the values of yourself, your team and your customers. Everyone can influence the culture, so you should be bringing your ideas and vision to the crafting of your firm’s culture.

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* 18. Who is responsible for setting the prevailing culture within regulated firms?

Everyone employed within a regulated firm

The FCA

The FCA and the PRA

The PRA

Those who lead regulated firms

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* 19. Which words are missing from the following statement?
“We define culture as the typical, habitual behaviours and mindsets that characterise a particular organisation. The behaviours are the ‘way things get done around here’, they are the way that we act, speak and make decisions without __

… consciously thinking about it

… reference to senior management

… regard to systems and controls

… seeking approval

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* 20. Which of the following statements is correct?

The four drivers of culture identified by the FCA are Organisational Competence, Leadership, Managing & Rewarding People and Governance.

The four drivers of culture identified by the FCA are Organisational Purpose, Leadership, Managing & Rewarding People and Governance.

The four drivers of culture identified by the FCA are Organisational Purpose, Leadership, Operational Resilience and Governance.

The four drivers of culture identified by the FCA are Organisational Purpose, Management, Managing & Rewarding People and Governance.

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* 21. Which three of the following are 3 of the 4 types of organisational culture identified by Cameron & Quinn?

Clan

Democratic

Hierarchy

Market

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* 22. Which organisational culture type can be most associated with the principle of “getting the results”?

Adhocracy

Clan

Hierarchy

Market

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* 23. Which of these statements best describes how your firm should approach culture?

A firm’s culture is defined by “the way things are done around here” – so it’s passed on by word of mouth and is based on pragmatic values and processes.

Culture is static and once identified it can be disseminated to all your staff, agency workers, suppliers and customers. It gives a firm basis for all relationships and is set in stone.

The culture of your firm is an ever-shifting set of values that ebb and flow with the changes in the marketplace and economic climate.

The identification of your firm’s culture is simply a starting point for an ongoing cycle of assessment and change that should be maintained and reviewed regularly.

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* 24. Please provide your details here to complete the quiz.

Name

Company

City/Town

Email Address

Phone Number