I think I have spotted an error in the April 2019 examiner's report which is a little concerning. I just want to check with someone and if it is an error, I'm wondering how to flag this to the Institute. I actually failed the exam by a few marks last time and seeing potential errors in the examiner's report for a number of marks is disheartening. In question 5(ii) we were asked to calculate the tax liability for each year. I assume that the Fixed Income fund is not taxed so in the report, I am following the right hand side results. Despite the fact that the report spells "resident" wrong (really? In an examiner's report..?) there seems to be an error in the calculations for being resident in country B - in the total CGT row, the answer gives 0 but shouldn't it be -50 + 37.5 = -12.5 ? Edit: I think there is also another (smaller) one in question 7(iii). The report says for fund A, the TWRR > MWRR but in the previous part of the question, they have given TWRR = 5.15% and MWRR = 5.28% or 5.05% (either is acceptable). If a marker was following this schedule for part (iii) blind, they would mark someone's comment that TWRR < MWRR as being incorrect. Hopefully not the case but still..?
Hi Thanks for posting, assuming I'm looking at the correct bit of the Examiners Report calculation I think that bit of the Q5 calculation is OK. As you say, adding together the CGT on Art and Property gives us -12.5 ie a negative capital gains tax. I think the examiners have assumed that the tax authorities will not pay money out to the investor in respect of this CGT loss, or allow the investor to offset the negative CGT against income tax (which I think is a pretty reasonable assumption) and so have set the CGT to be zero. In the Examiners Report there is a note below the table about this situation - it looks as though the examiners also gave credit to candidates who used the CGT loss from year 2 to offset the CGT liability in year 3 I see what you are saying in Q7(iiii) and I agree it would be nice if the Examiners Report made explicit mention of the alternative scenario. In practice though I'm sure the examiners won't be marking blind and will be aware of the range of potential answers to part(ii) (indeed their marking schedule might have covered the options more explicitly in part (iiii) than the Examiners Report does - I don't know). I hope that helps, best of luck in the exam! Gresham
Thanks for this, Gresham! That definitely clears that up for me. Thankyou- I've got everything crossed this time
