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AAFM CTEP Chartered Trust & Estate Planner® (CTEP®) Certification Examination Exam Practice Test

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Total 472 questions

Chartered Trust & Estate Planner® (CTEP®) Certification Examination Questions and Answers

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Question 1

While preparing a Will, the person who is making the Will must declare ________ that he is making the Will in his full senses and free from any kind of pressure. Once the testator completes writing the Will, he must the sign the Will very carefully in presence of at least __________independent witnesses.

Options:

A.

At the end, Two

B.

In the Beginning, Two

C.

At the end, One

D.

In the Beginning, One

Question 2

Which of the following is essential for contract?

Options:

A.

Free Consent

B.

Witness

C.

Signatory

D.

Consideration

Question 3

A trust involves_______ parties. ___________ is the person who establishes the trust.

Options:

A.

Two, Settlor

B.

Three, Settlor

C.

Two, Executor

D.

Three, Executor

Question 4

Section 45 of the Insurance Act,1938 places a check on the power of insurer to avoid life policy on the ground of innocent misrepresentation after the expiry of ____________ of the policy term

Options:

A.

Six month

B.

One year

C.

Two years

D.

Five years

Question 5

___________ is the submission of a disputed matter to an impartial person.

Options:

A.

Mediation

B.

Negotiation

C.

Arbitration

D.

Litigation

Question 6

If a soldier makes a Will in oral form, for what time will it be valid?

Options:

A.

It will be valid always

B.

Valid for only a month

C.

Valid for three months

D.

Soldier cannot make Oral will

Question 7

Failure to create an Estate Plan leads to __________

Options:

A.

Only (i)

B.

Only (ii)

C.

Neither of the (ii)

D.

Both (i) and (ii)

Question 8

Which of the following statement(s) about Minute Book is/are correct?

Options:

A.

Both (i) and (ii)

B.

Neither (i) nor (ii)

C.

Only (i)

D.

Only (ii)

Question 9

There are ______types of Charitable Trust. Out of these, in ________________ the value of assets are protected against inflation as the payouts vary with the asset value.

Options:

A.

Two, Charitable Remainder Unit Trust

B.

Two, Charitable Remainder Annuity Trust

C.

Three, Charitable Remainder Unit Trust

D.

Three, Charitable Remainder Annuity Trust

Question 10

More than_______ in wealth classifies the person as “Ultra HNI”

Options:

A.

$1 million

B.

$10 million

C.

$50 million

D.

$100 million

Question 11

The selling/ planning process has __________ steps.

Options:

A.

Four

B.

Five

C.

Seven

D.

Eight

Question 12

There are four general categories of charitable gifts for donors and non-profits to consider. Out of these________ and ____________ require no contracts, trusts, trustees or special income tax returns. On the other hand, for __________ and _____________most donors and non-profits will need significant level of financial sophistication.

Options:

A.

Outright Gifts, Bequest, Life Income Gifts, Family Foundations

B.

Outright Gifts, Life Income Gifts, Bequest, Family Foundations

C.

Family Foundation, Bequest, Life Income Gifts, Outright Gifts

D.

Family Foundation, Outright Gifts, Life Income Gifts, Bequest

Question 13

According to__________ of the ‘Registration Act, 1908’ the registration of a Will is not compulsory.

Options:

A.

Section 8

B.

Section 48

C.

Section 1

D.

Section 6

Question 14

What is Probate?

Options:

A.

A Will made out of undue influence

B.

The process of distribution of estate

C.

A person who pays the ‘Inheritance Tax’

D.

Court process by which a will is proved valid or invalid

Question 15

Which of the following statement(s) about Public Trust is/are correct?

Options:

A.

Only (i)

B.

Only (ii)

C.

Both (i) and (ii)

D.

Neither (i) nor (ii)

Question 16

Which of the following statement(s) about Estate Planning is/are correct?

Options:

A.

(i),(ii),(iii) and (iv)

B.

Only (iii)

C.

(iii) and (iv)

D.

Only (ii)

Question 17

In case one wants to sell his/her business interest __________ and __________ are not appropriate.

Options:

A.

Lifetime Gifts, Bequest

B.

Lifetime Sale, Bequest

C.

Estate Sale, Buy-Sell Agreement

D.

Buy Sell Agreement, Bequest

Question 18

Estate planning has_____ phases.

Options:

A.

Nil

B.

Two

C.

Three

D.

Depends on the value of estate

Question 19

As per the Ancient Hindu Law, there are ____________ Vedas. Scholars have determined that ___________ is the oldest of the Vedas.

Options:

A.

Four, Atharva Veda

B.

Four, Rig Veda

C.

Three, Atharva Veda

D.

Three, Rig Veda

Question 20

Gift received is not taxable in hands of

Options:

A.

Individual

B.

HUF

C.

Society

D.

None of the above

Question 21

Which of the following statement(s) about Halal Credit Cards is/are correct?

Options:

A.

Both (i) and (ii)

B.

Neither (i) nor (ii)

C.

Only (i)

D.

Only (ii)

Question 22

In case of Loss of Thumb, what is the Percentage of Compensation given (as per Workmen’s Compensation Act)?

Options:

A.

20%

B.

25%

C.

30%

D.

50%

Question 23

In case of non-resident, who is carrying on shipping business, his Indian income shall be presumed to be:

Options:

A.

5% of certain amount received

B.

7.5% of certain amount received

C.

10% of certain amount received

D.

8.5% of certain amount received

Question 24

In context to Hindu Marriage Act, 1955 what is “Sapinda Relationship”?

Options:

A.

It is with reference to any person extends as far as the third generation (inclusive) in the line of ascent through the mother and, the fifth (inclusive) in the line of ascent through the father.

B.

It is with reference to any person extends as far as the third generation (inclusive) in the line of ascent through the father and, the fifth (inclusive) in the line of ascent through the mother.

C.

It is with reference to any person extends as far as the second generation (inclusive) in the line of ascent through the mother and, the third (inclusive) in the line of ascent through the father.

D.

It is with reference to any person extends as far as the second generation (inclusive) in the line of ascent through the father and, the third (inclusive) in the line of ascent through the mother.

Question 25

Deduction under section 80QQB is allowed in respect of royalty income to:

Options:

A.

an individual who is an author of a book

B.

an individual who is resident in India and who is an author of a book

C.

an individual who is resident in India and who is either an author of a book or a joint author of the book

D.

None of these

Question 26

Vikrant Juneja gifted his house property to his wife in year 2007. Mrs. Juneja then lets out this house @ Rs. 5000 per month. The income from such house property will be taxable in the hands of:

Options:

A.

Mrs. Juneja

B.

Vikrant. However income will be computed first as Mrs. Juneja’s income and thereafter clubbed in the income of Manish.

C.

Vikrant, as he will treated as deemed owner & liable to pay tax

D.

Anyone amongst both of them, whose income is greater.

Question 27

______________ means a contract in which advance payment is made for good to be delivered later on. ____________ is a special kind of partnership where one partner gives money to the other for investing it in a commercial enterprise.

Options:

A.

Bai Salam, Mudarabah

B.

Bai Salam, Murabahah

C.

Bai Muajjal, Musharakah

D.

Bai Muajjal,Musawamah

Question 28

Which of the following statement(s) about Reverse Mortgage Scheme is/are correct?

Options:

A.

All of the above

B.

None of the above

C.

Both (i) and (iv)

D.

All except (i)

Question 29

Employees Provident Fund is applicable to firms employing over _______________ employees

Options:

A.

20

B.

15

C.

10

D.

25

Question 30

X owns a piece of land situated in Varanasi (Date of acquisition : March 1, 1983, Cost of acquisition Rs. 20,000/- value adopted by Stamp duty authority at the time of purchase Rs. 45,000/-).On March 30, 2012 the piece of land is transferred for 4 lakh. Find out the capital gains chargeable to tax if the value adopted by the Stamp duty authority is 5.5 lakh. X does not dispute it. [CII-12-13: 852,11-12: 785,10-11:711]

Options:

A.

Rs. 4,05,963/-

B.

Rs. 3,45,963/-

C.

Rs. 3,80,963/-

D.

Rs. 4,15,963/-

Question 31

Which of the following statement(s) about ‘Doctrine of Subrogation’ is/are correct?

Options:

A.

Only (i)

B.

Only (ii)

C.

Neither (i) nor (ii)

D.

Both (i) and (ii)

Question 32

Scholarship received by a student was Rs. 2,000 per month. He spends Rs. 15,000 for meeting the cost of education during the year. The treatment for the balance amount Rs. 9,000 is:

Options:

A.

Taxable

B.

A casual income

C.

Exempt

D.

None of the above

Question 33

In_________ type of arrangement, the mortgagor binds himself to repay the mortgage money on a certain date.

Options:

A.

Simple Mortgage

B.

English Mortgage

C.

Usufructuary Mortgage

D.

Balloon Mortgage

Question 34

Which of the following is allowed as deduction from net annual value of a property?

Options:

A.

Repairs & collection charges

B.

Insurance premium

C.

Interest on loan borrowed for repairs

D.

All the above

Question 35

Compulsory audit of account is required u/s 44AB of IT, if the total sales/ turnover exceeds _______

Options:

A.

Rs. 10,00,000

B.

Rs. 40,00,000

C.

Rs 60,00,000

D.

Rs. 1,00,00,000

Question 36

As per Muslim Law, if the husband is missing for _________ the wife may file a petition for the dissolution of her marriage. __________ of Dissolution of Muslim Marriages Act provides that that where a wife files petition for divorce under this ground, she is required to give the names and addresses of all persons who would have been the legal heirs of the husband on his death.

Options:

A.

7 years, Section 3

B.

7 years, Section 5

C.

4 years, Section 3

D.

4 years, Section 5

Question 37

_________ means the amount of _________or its equivalent value in money payable under the Muslim law annually by a Muslim during the month of Ramadan to be used for religious or charitable purposes recognized by the Muslim law.

Options:

A.

Fitrah, Rice

B.

Emas kahwin, Rice

C.

Fitrah, Wheat

D.

Emas kahwin, Wheat

Question 38

If there default of distribution under the rules of Intestate Succession Act (Singapore) _______________ shall be entitled to whole of the estate.

Options:

A.

IRAS

B.

MAS

C.

ACRA

D.

None of the above

Question 39

Which of the following income comes under “FDAP Income”?

Options:

A.

Both (i) and (ii)

B.

All except (iv)

C.

All except (iii)

D.

All of the above

Question 40

_____________ is for Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and___________ if for Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding.

Options:

A.

Form W-8BEN, Form W-8CE

B.

Form W-8BEN, Form W-8EXP

C.

Form W-8ECI, Form W-8IMY

D.

Form W-8ECI, Form W-8EXP

Question 41

In UK, for year 2013-2014 the Income limit for Personal Allowance is _____________ and the Personal Allowance for people born after 5 April 1948 is ___________.

Options:

A.

£100,000; £9,440

B.

£100,000; £10,500

C.

£150,000; £10,660

D.

£150,000; £10,090

Question 42

Which of the following statement(s) about Hire Purchase Agreement is/are correct?

Options:

A.

Only (i)

B.

Only (ii)

C.

Both (i) and (ii)

D.

Neither (i) or (ii)

Question 43

The Hire Purchase System is regulated by the Hire Purchase Act ________

Options:

A.

1972

B.

1982

C.

1962

D.

1952

Question 44

Which of the following statements about Asset Protection trust is/are correct?

Options:

A.

Only (i)

B.

All except (ii)

C.

All except (iii)

D.

All of the above

Question 45

In US, the amount of standard deduction is __________ for married individuals filing a separate return.

Options:

A.

$6,100

B.

$8,950

C.

$12,200

D.

$1,000

Question 46

The Indian Succession Act came into operation on ______________________

Options:

A.

30th September 1935

B.

30th November 1925

C.

30th September 1925

D.

None of the above

Question 47

Deadline for filing corporate tax return is ______________.

Options:

A.

30-Nov

B.

31-Dec

C.

1-Jan

D.

1-Apr

Question 48

__________________ is spoken rather than dictated or written.

Options:

A.

Nuncupative Will

B.

Notarial Will

C.

Mirror Will

D.

Simple Will

Question 49

As per the tax structure in the UK, Inheritance Tax will be due at ____________ on the amount over the nil rate band.

Options:

A.

10 percent

B.

36 percent

C.

40 percent

D.

15 percent

Question 50

Which of the following statement(s) about Offshore Investment Bond is/are correct?

Options:

A.

Only (i)

B.

Only (ii)

C.

Neither (i) nor (ii)

D.

Both (i) and (ii)

Question 51

In India where the Registration Act, 1908 is in force, the Power of Attorney should be authenticated by a______________.

Options:

A.

Sub-Registrar

B.

Registrar

C.

Either of a or b

D.

Notary

Question 52

The threshold amount for tax on Net Investment Income is __________in the case of a joint return or surviving spouse, _________in the case of a married individual filing a separate return.

Options:

A.

$250,000; $125,000

B.

$125,000; $250,000

C.

$350,000; $175,000

D.

$175,000; $350,000

Question 53

The consideration for the Lease is called _______________

Options:

A.

Rent

B.

Rental

C.

Either b or c

D.

Lease Premium

Question 54

Which of the following statement(s) about Will is/are correct?

Options:

A.

Both (i) and (ii)

B.

Only (i)

C.

Neither (i) or (ii)

D.

Only (ii)

Question 55

______________ of the Transfer Property Act permits the transfer of property only to one or more living persons.

Options:

A.

Section 1

B.

Section 5

C.

Section 8

D.

Section 10

Question 56

Which of the following statement(s) about Estate duty is/are correct?

Options:

A.

Neither (i) or (ii)

B.

Only (i)

C.

Only (ii)

D.

Both (i) and (ii)

Question 57

________________ is a popular mode of transfer of property to God or Almighty, under the Mohammedean Law.

Options:

A.

SheBaitsor Trust

B.

Mutawali Trust

C.

Dedicated Trust

D.

Waqf

Question 58

Which of the following is/are ancillary benefit(s) of Discretionary Family Trust?

Options:

A.

All except (i)

B.

All except (ii)

C.

Only (iii)

D.

All of the above

Question 59

Is there any default for not/late filling of wealth tax returns?

Options:

A.

Nil, there is no default for not/late filling of wealth tax returns as you can file at the end date of any quarter.

B.

Yes, penal interest at the rate of 1% every month or part of the month of delay is chargeable for Non/Late filling of Return.

C.

Yes, penal interest at the rate of 2% per month of the part of the month of delay is chargeable for Non/Late filling of return.

D.

Nil, there is no default for not/late of wealth tax returns as the Wealth tax is deducted at source.

Question 60

Which of the following is/are disadvantage(s) of Living Trust?

Options:

A.

Only (i)

B.

Only (ii)

C.

Neither (i) or (ii)

D.

Both (i) and (ii)

Question 61

______________ of the Income Tax Act provides for the registration of a Charitable Trust. _____________ of the Income Tax Act contains the provision that the profits and gains of the business carried on by a charitable trust would be fully exempt from tax if it is attains the objects of the trust.

Options:

A.

Section 12A, Section 11 (4A)

B.

Section 11A, Section 12 (4A)

C.

Section 12A, Section 11 (2A)

D.

Section 11A, Section 12 (2A)

Question 62

What is the full form of DFT?

Options:

A.

Discretionary Foundation Trust

B.

Discretionary Family Trust

C.

Discretionary Foundation Trustor

D.

Discretionary Family Trustor

Question 63

The Societies Registration Act came into force on _____________________

Options:

A.

24th May,1860

B.

24th May,1862

C.

21st May,1860

D.

21st May,1862

Question 64

Which of the following statement(s) about Indian Contract Act, 1872 is/are correct?

Options:

A.

Neither (i) or (ii)

B.

Both (i) and (ii)

C.

Only (i)

D.

Only (ii)

Question 65

Which of the following is/ are disadvantage(s) of a Will?

Options:

A.

All of the above

B.

Only (iv)

C.

Both (ii) and (iv)

D.

None of the above

Question 66

Which of the following incomes are not included for computation of taxable income of a Trust/ Society?

Options:

A.

All except (i)

B.

All except (iv)

C.

All except (ii)

D.

All of the above

Question 67

Which of the following is an essential condition for obtaining exemption of the income of a Charitable Trust?

Options:

A.

Neither (i) or (ii)

B.

Both (i) and (ii)

C.

Only (i)

D.

Only (ii)

Question 68

Which of the following statement(s) is/are correct?

Options:

A.

Both (i) and (ii)

B.

Only (i)

C.

Only (ii)

D.

Neither (i) nor (ii)

Question 69

Which of the following statement(s) about UTMA is/are correct?

Options:

A.

Neither (i) or (ii)

B.

Both (i) and (ii)

C.

Only (i)

D.

Only (ii)

Question 70

You are an Estate Planner. Mr. Arun Mittal is your client. He is inquisitive to know about Trusts. You explain him that on the basis of intention, Trust is of ____________ types and on the basis of Purpose, Trust is of __________ types. He further asks you that which of these are the requisites for the creation of a Trust out of these

What will be your reply to all of the above questions?

Options:

A.

Five, Two, None of the above

B.

Five, Two, All of the above

C.

Four, Four, Only (ii)

D.

Five, Four, Both (ii) and (iii)

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Total 472 questions