QFA Financial Planning Errors Prep
Questions with Detailed Answers 2026-
2027 Updated.
Alan and Fiona are both aged 48. They are married and have one child, aged 6.
Alan is a self-employed retailer and earns €70,000 pa. Fiona is a pensionable employee and
earns €50,000 pa.
Alan set up a PRSA a few years ago and contributes €500 pm. He plans to add in a lump sum of
€30,000 as he will get full tax relief at his marginal rate. Alan has a pension term assurance life
policy costing €35 pm and he receives tax relief at the standard rate. Fiona also has the same
policy on her life. - Answer Alan can only claim tax relief on his PRSA contributions to a
maximum of 25% of earnings which is €17,500 in any year.
In addition, the pension term assurance premiums of €420 are allowed for tax relief at his
marginal rate within this limit of 25% of earnings.
Fiona is in pensionable employment so cannot effect a pension term assurance plan, unless she
has relevant earnings from another source. Perhaps it is a different form of life cover.
They plan to set up an annual gift of €3,000 each to their child so that the accumulated funds
will not be taxable as a gift or inheritance by him. - Answer No error.
Fiona is concerned that if she cannot work due to illness, she will have no income. She plans to
effect a serious illness plan which would pay her a tax-free income after a certain period of time.
Alan and Fiona have a lump sum for investment. They have decided not to clear their mortgage
as they have a tracker rate and can easily afford the repayments. - Answer Fiona is an
employee and would receive the state illness benefit if she was unable to work due to illness.
A serious illness plan is a tax-free lump sum, not a tax-free income.
A Serious illness plan does not have a deferred period.
An income protection plan would pay a taxable income and would be paid after a certain period
of time (the deferred period). Perhaps this is the policy type she plans to effect.
Alan and Fiona have private health insurance, so they do not qualify to claim tax relief on any
medical expenses for themselves, or for medical expenses incurred by them for Alan's mother. -
, Answer They may be able to claim tax relief if their insurance does not cover all of the costs,
for example, specialist treatment, and 'home' care.
An individual can claim tax relief on unreimbursed qualifying medical expenses incurred in
respect of the individual himself or any other individual on whose behalf he or she pays medical
expenses.
Alan invested in five-year post office savings certificates which were capital secure and had no
investment risk. The funds matured and he paid DIRT at 33% and USC, but no PRSI on the
return. - Answer The funds in state savings are capital secure but are subject to an investment
risk: inflation risk, as returns are fixed in monetary terms.
The return is tax-free so there is no DIRT or USC payable.
They set up a unit-linked savings plan for their child's education expenses. The units are priced
weekly, but they cannot access it until maturity. They don't require the funds for twelve years
but will take them at maturity in ten years. The quotation showed an expected growth pa of 4%
so they will have €30,000 at maturity. - Answer A unit linked savings has no maturity date.
It is open-ended so they can invest for as long as they wish and encash it at any time, possibly
subject to an early encashment
charge.
The units are priced daily.
The expected growth is simply a projection and is dependent on investment factors such as
growth, volatility and timing of unit purchase.
Fiona plans to join her Employer's SAYE scheme. She can save for two or three years and must
then purchase shares in the company, which will be 70% of the actual share price at the end of
the agreed term. - Answer An SAYE scheme is set up for three or five years.
Fiona has the option to purchase the shares at the end of the savings term.
The price of the shares is determined at the start, at the date of the option.
The share price cannot be more than 75% of the company's share price at the start, at date of
option.
Questions with Detailed Answers 2026-
2027 Updated.
Alan and Fiona are both aged 48. They are married and have one child, aged 6.
Alan is a self-employed retailer and earns €70,000 pa. Fiona is a pensionable employee and
earns €50,000 pa.
Alan set up a PRSA a few years ago and contributes €500 pm. He plans to add in a lump sum of
€30,000 as he will get full tax relief at his marginal rate. Alan has a pension term assurance life
policy costing €35 pm and he receives tax relief at the standard rate. Fiona also has the same
policy on her life. - Answer Alan can only claim tax relief on his PRSA contributions to a
maximum of 25% of earnings which is €17,500 in any year.
In addition, the pension term assurance premiums of €420 are allowed for tax relief at his
marginal rate within this limit of 25% of earnings.
Fiona is in pensionable employment so cannot effect a pension term assurance plan, unless she
has relevant earnings from another source. Perhaps it is a different form of life cover.
They plan to set up an annual gift of €3,000 each to their child so that the accumulated funds
will not be taxable as a gift or inheritance by him. - Answer No error.
Fiona is concerned that if she cannot work due to illness, she will have no income. She plans to
effect a serious illness plan which would pay her a tax-free income after a certain period of time.
Alan and Fiona have a lump sum for investment. They have decided not to clear their mortgage
as they have a tracker rate and can easily afford the repayments. - Answer Fiona is an
employee and would receive the state illness benefit if she was unable to work due to illness.
A serious illness plan is a tax-free lump sum, not a tax-free income.
A Serious illness plan does not have a deferred period.
An income protection plan would pay a taxable income and would be paid after a certain period
of time (the deferred period). Perhaps this is the policy type she plans to effect.
Alan and Fiona have private health insurance, so they do not qualify to claim tax relief on any
medical expenses for themselves, or for medical expenses incurred by them for Alan's mother. -
, Answer They may be able to claim tax relief if their insurance does not cover all of the costs,
for example, specialist treatment, and 'home' care.
An individual can claim tax relief on unreimbursed qualifying medical expenses incurred in
respect of the individual himself or any other individual on whose behalf he or she pays medical
expenses.
Alan invested in five-year post office savings certificates which were capital secure and had no
investment risk. The funds matured and he paid DIRT at 33% and USC, but no PRSI on the
return. - Answer The funds in state savings are capital secure but are subject to an investment
risk: inflation risk, as returns are fixed in monetary terms.
The return is tax-free so there is no DIRT or USC payable.
They set up a unit-linked savings plan for their child's education expenses. The units are priced
weekly, but they cannot access it until maturity. They don't require the funds for twelve years
but will take them at maturity in ten years. The quotation showed an expected growth pa of 4%
so they will have €30,000 at maturity. - Answer A unit linked savings has no maturity date.
It is open-ended so they can invest for as long as they wish and encash it at any time, possibly
subject to an early encashment
charge.
The units are priced daily.
The expected growth is simply a projection and is dependent on investment factors such as
growth, volatility and timing of unit purchase.
Fiona plans to join her Employer's SAYE scheme. She can save for two or three years and must
then purchase shares in the company, which will be 70% of the actual share price at the end of
the agreed term. - Answer An SAYE scheme is set up for three or five years.
Fiona has the option to purchase the shares at the end of the savings term.
The price of the shares is determined at the start, at the date of the option.
The share price cannot be more than 75% of the company's share price at the start, at date of
option.
