AAFM CTEP Exam - Topic 3 Question 25 Discussion

Actual exam question for AAFM's CTEP exam

Question #: 25
Topic #: 3

In case of Discretionary Discounted Gift Trust, the settlor has the right to receive annual capital payments upto ________ of the original capital. The trust is suitable for individuals who have a liability to ______________ and are happy to make substantial gifts.

A5%; Gift Tax

B8%; Transfer Tax

C8%; Estate Duty

D5%; Inheritance Tax

Show Suggested Answer

Suggested Answer: A

by Elli at Jul 29, 2023, 08:34 PM

Limited Time Offer

25%

Off

Get Premium CTEP Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Norah

5 months ago

Makes sense for those making big gifts!

upvoted 0 times

...

Xuan

5 months ago

Wait, are we sure about the 5%? Seems low.

upvoted 0 times

...

Darrel

6 months ago

Definitely Inheritance Tax, right?

upvoted 0 times

...

Kassandra

6 months ago

I thought it was 8%?

upvoted 0 times

...

Sunshine

6 months ago

It's 5% for sure!

upvoted 0 times

...

Juliann

6 months ago

I’m leaning towards 8% as well, but I can't recall if it was for Estate Duty or Transfer Tax.

upvoted 0 times

...

Shakira

6 months ago

I’m a bit confused; I thought it was 5% for Inheritance Tax. Did we cover that in class?

upvoted 0 times

...

Myong

7 months ago

I remember practicing a similar question, and I believe it's 8% for Transfer Tax.

upvoted 0 times

...

Merlyn

7 months ago

I think the annual capital payments are up to 5%, but I'm not entirely sure about the tax liability part.

upvoted 0 times

...

Kimberlie

7 months ago

This seems pretty straightforward to me. Julio is seeking coverage for his wife, unmarried 18-year-old daughter, and 80-year-old father who relies on him. Those all fit the typical definition of dependents, so I'm going to go with answer A.

upvoted 0 times

...

Shenika

7 months ago

This is a good one to practice. I'll carefully review the market share, growth, and revenue data to determine the right BCG classification. Gotta make sure I don't miss any details on the exam.

upvoted 0 times

...

Veronique

7 months ago

I've got a good feeling about this one. Based on my understanding of how encryption works in storage systems, the data-at-rest encryption for HPE 3PAR StoreServ is most likely happening at the physical disk level. I'll go with that as my answer.

upvoted 0 times

...

Marylou

7 months ago

I'm pretty positive that documenting the understanding of internal controls is something auditors must definitely do, right?

upvoted 0 times

...

Staci

11 months ago

I'm more interested in the 'Discretionary Discounted Gift Trust' than the actual question. Sounds like a trust fund for indecisive billionaires.

upvoted 0 times

...

Mayra

12 months ago

This question is as clear as mud. I'll just guess and say A. 5%; Gift Tax. Hopefully, that's the right answer!

upvoted 0 times

Jesusita

10 months ago

User 3: I agree with Jesusita, C) 8%; Estate Duty sounds right.

upvoted 0 times

...

Arthur

11 months ago

User 2: I'm not sure, but I'll go with C) 8%; Estate Duty.

upvoted 0 times

...

Ula

11 months ago

User 1: I think the answer is D) 5%; Inheritance Tax.

upvoted 0 times

...

Cassie

12 months ago

Wait, is this a trick question? I'm going to go with B. 8%; Transfer Tax. Sounds like the most reasonable option to me.

upvoted 0 times

Shenika

10 months ago

I agree with you, B. 8%; Transfer Tax sounds like the right answer.

upvoted 0 times

...

Shay

11 months ago

I'm going with A. 5%; Gift Tax. It seems like the safest choice.

upvoted 0 times

...

Marci

11 months ago

I think it's D. 5%; Inheritance Tax. That makes more sense to me.

upvoted 0 times

...

Janessa

1 year ago

Hmm, I'm not sure about this one. I'm leaning towards D. 5%; Inheritance Tax, but I could be wrong.

upvoted 0 times

Genevive

11 months ago

I agree with you, D) 5%; Inheritance Tax sounds correct.

upvoted 0 times

...

Roy

11 months ago

I believe it's A) 5%; Gift Tax.

upvoted 0 times

...

Lucy

11 months ago

I think it's actually C) 8%; Estate Duty.

upvoted 0 times

...

Ronny

1 year ago

I think the answer is C. 8%; Estate Duty. That makes the most sense to me.

upvoted 0 times

Annett

10 months ago

I'm not sure, but A. 5%; Gift Tax could also be a possibility.

upvoted 0 times

...

Jestine

10 months ago

I'm leaning towards B. 8%; Transfer Tax as the answer.

upvoted 0 times

...

Janine

10 months ago

I think it might be D. 5%; Inheritance Tax instead.

upvoted 0 times

...

Louann

10 months ago

I agree, C. 8%; Estate Duty seems like the correct answer.

upvoted 0 times

...

Reed

11 months ago

I'm not sure, but I think it could be B. 8%; Transfer Tax.

upvoted 0 times

...

Charisse

11 months ago

I agree with you, C. 8%; Estate Duty seems like the correct answer.

upvoted 0 times

...

Evangelina

11 months ago

I think it might be A. 5%; Gift Tax.

upvoted 0 times

...

Margurite

12 months ago

I believe the answer is D. 5%; Inheritance Tax.

upvoted 0 times

...

Berry

1 year ago

I'm not sure about this one. Can someone explain why the answer is D) 5%; Inheritance Tax?

upvoted 0 times

...

Weldon

1 year ago

I agree with Ayesha. The settlor can receive annual capital payments up to 5% of the original capital in a Discretionary Discounted Gift Trust.

upvoted 0 times

...

Ayesha

1 year ago

I think the answer is D) 5%; Inheritance Tax.

upvoted 0 times

...