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Flashcards in C2 - Written Qs Deck (2)
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Susan works for a company on a part-time basis. She earns £8,000 p.a. in 2019/20. What is the maximum contribution that she can make in 2019/20 if the entire contribution is to be eligible for tax relief?


100% of earnings, i.e. £8,000


Sheila, who is 60, will be retiring and taking her benefits in 2019/20. Her total benefits have been valued at £1.75 million. She does not have any form of transitional protection.
Calculate the lifetime allowance charge payable by Sheila if she takes the excess above the lifetime allowance as:

a. a cash lump sum;
b. an income.


The lifetime allowance charge will be:

a. (£1.75million - £1.055million) x 55% = £382,250 if the excess is taken as a cash lump sum
b. (1.75million - £1.055million) x25% = £173,750 if the excess is taken as an income