international finance and administration - icsa...4 in which document would you expect the proper...

© ICSA, 2016 of 30

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Subject no. 52B

Paper 1

International Finance and Administration Wednesday morning, 30 November 2016 Time allowed: 3 hours Do not open this examination paper until the presiding officer or an invigilator tells you to. You must not take this paper out of the examination room. The examination paper contains 30 questions and is divided into four sections. You must attempt all questions in Section A and Section B, two questions in Section C and two questions in Section D. Section A contains 20 marks, Section B contains 50 marks, Section C contains 30 marks and Section D contains 30 marks. There are 130 marks available in total for the paper. You should allow yourself approximately 30 minutes in total to answer the questions in Section A, 70 minutes in total to answer the questions in Section B and 20 minutes for each of the questions attempted in Sections C and D. You may continue your answers on a separate sheet of paper if necessary. Separate answer sheets are available from the invigilator.

Note: Unless otherwise specified, you should assume that an Act or an organisation referred to in the questions is a UK Act or organisation.

© ICSA, 2016 of 30

Section A Answer all the questions in this section. Continue your answers on a separate sheet of paper if necessary. 1 Give another term used to refer to ‘offshore finance centres’.

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(1 mark) 2 A settlor can create a trust by means of a written inter vivos document or by a will. Give one other

way in which a settlor can create a trust. _________________________________________________________________________

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3 What is the effect on a contract if it is deemed illegal?

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(1 mark) 4 In which document would you expect the proper law of a trust to be recorded?

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5 Certainty of intent and certainty of subject are two of the so-called ‘three certainties’ required for a

trust to be valid. What is the third certainty?

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6 A father makes a substantial financial gift to his son. This gift is potentially exempt from Inheritance Tax, provided the father lives for at least:

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A 5 years after making the gift.

B 6 years after making the gift. C 7 years after making the gift.

D 8 years after making the gift.

(1 mark)

© ICSA, 2016 of 30

7 What is the common law remedy for breach of contract?

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(1 mark) 8 Value added tax (VAT) is charged at a flat rate in the UK and is added to the price of certain goods

and services. Is this true or false?

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True

False (1 mark) 9 Give two features of a foundation.

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10 The Alternative Investment Fund Managers Directive (AIFMD) imposes conditions on all alternative

investment fund managers. Give one of these conditions.

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(1 mark)

11 A compulsory liquidation of a company occurs when the company is ordered to be wound up by a

court. Give two examples of the grounds upon which a court may order such a winding up.

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(2 marks)

© ICSA, 2016 of 30

12 What is the name of the UK arrangement under which promoters of tax avoidance schemes have

to declare certain details to HMRC?

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13 Explain how the ‘Faster Payments Service’ operates.

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(4 marks) 14 If a court decides to apply the maxim “stare decisis” to a decision, what does this mean?

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15 When are the first directors of a company usually appointed?

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Total for Section A = 20 marks

© ICSA, 2016 of 30

Section B Answer all the questions in this section. Continue your answers on a separate sheet of paper if necessary. 16 Explain why the infrastructure of an offshore finance centre makes it attractive to investors.

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(6 marks)

17 Some trust companies provide a ‘registered office only’ service to clients. Explain how such companies deal with the risks this involves.

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(6 marks)

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18 Explain how a trust can be revoked and the effect of a revocation.

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19 Incorporated and Separate Limited Partnerships may suit a variety of structures. Give four suitable structures:

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(4 marks)

© ICSA, 2016 of 30

20 Describe how trustees are expected to act in executing their duties.

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21 Explain the differences between a fixed term deposit and a current account.

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(6 marks)

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22 The Prudential Regulation Authority (PRA)’s approach to regulation has three main characteristics. Describe two of these.

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(6 marks)

23 Explain how a captive insurance company may be advantageous to its parent.

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24 Explain what the functions of the Basel Committee on Banking Supervision are.

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Total for Section B = 50 marks

© ICSA, 2016 of 30

Section C Answer two questions only. Continue your answers on a separate sheet of paper if necessary. 25 Anti-Money Laundering (AML) and Combatting of Financing of Terrorism (CFT) legislation in

offshore jurisdictions is constantly changing in order to address new circumstances. Evaluate the impact these changes are having on trust and company administration firms and their employees.

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© ICSA, 2016 of 30

26 Discuss the impact of the rule against perpetuities as it applies in England and elsewhere.

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© ICSA, 2016 of 30

27 Explain how transfer pricing operates and discuss the effectiveness of efforts to restrict its use.

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© ICSA, 2016 of 30

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© ICSA, 2016 of 30

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Total for Section C = 30 marks

© ICSA, 2016 of 30

Section D Answer two questions only. Continue your answers on a separate sheet of paper if necessary. 28 Evaluate how effective a trust can be if an investor aims to reduce their tax liability and preserve

their confidentiality. (15 marks)

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© ICSA, 2016 of 30

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© ICSA, 2016 of 30

29 The classifications of different types of directors include de jure, de facto and alternate. Explain the role of each type of director and explain how each type of director is appointed.

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© ICSA, 2016 of 30

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© ICSA, 2016 of 30

30 In the context of UK company law, decisions at general meetings can be proposed and passed using different types of resolution. Compare and contrast ‘ordinary’ and ‘special’ resolutions.

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© ICSA, 2016 of 30

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© ICSA, 2016 of 30

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Total for Section D = 30 marks

Total for paper = 130 marks

END

The scenarios included here are entirely fictional. Any resemblance of the information in the scenarios to real persons or organisations, actual or perceived, is purely coincidental.

Do not write on this page – examiner use only Section A Section B Section C Section D

Question Question Question Question

1 16 25 28

2 17 26 29

3 18 27 30

4 19 Total Total

5 20

6 21

7 22

8 23

9 24

10 Total

11

12

13

14

15

Total

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Reviewer (full name):

Clerical check (full name):

Examiner review:

Total marks for paper:

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