HMRC tax regime: benefits, reliefs and overseas schemes Flashcards
(89 cards)
1
Q
Q: From what age can pension benefits usually be taken?
A
A: Benefits can be taken from the normal minimum pension age, which is currently 55. However, it can be taken earlier on ill-health grounds or if the member has a protected pension age.
2
Q
Q: In what forms can registered pension schemes pay out benefits?
A
A: Registered pension schemes can pay out benefits in the form of an income or as a lump sum.
3
Q
Q: How much of the benefits can be taken as a PCLS?
A
A: When benefits are taken as a scheme pension, a lifetime annuity, or a drawdown pension, the member can take up to 25% of the value of the benefits as a PCLS (tax-free cash).
4
Q
Q: What happens if an UFPLS is taken?
A
A: If an UFPLS (uncrystallised funds pension lump sum) is taken, the member does not receive a PCLS. However, typically 25% of the funds taken will be paid tax-free, and the remainder will be taxed as the member’s pension income via PAYE.
5
Q
Q: How is pension income taxed once it is in payment?
A
A: Once in payment, pension income is taxed as the pensioner’s earned income via PAYE.
6
Q
Q: What happens if a tax coding notice for a DC pension has not been issued by HMRC?
A
A: If a tax coding notice has not been issued by HMRC, the taxable portion of any flexible payment will be taxed using the PAYE system on a ‘month one basis’.
7
Q
Q: How is the format in which death benefits can be received determined?
A
A: The format in which death benefits can be received is determined by whether someone is a dependant or a nominee/successor.
8
Q
Q: What is the two-year window in relation to death benefits?
A
A: The two-year window is the time frame in which death benefits must be designated to an income-producing contract or paid out as a lump sum in the case of a lump-sum death benefit.
9
Q
Q: Are lump-sum death benefits received in respect of a member who died prior to age 75 taxable?
A
A: No, any lump-sum death benefits received in respect of a member who died prior to age 75 is paid free of tax, provided the funds are paid out within the two-year window.
10
Q
Q: How are lump-sum death benefits received in respect of a member who died after reaching age 75 taxed?
A
A: Any lump-sum death benefits received in respect of a member who died having reached age 75 is taxable. If the payment is made directly to the beneficiary, it is taxable as their pension income via PAYE. If the payment is made to an individual who is receiving it as a trustee or personal representative, it is subject to the special lump-sum death benefits charge of 45%.
11
Q
Q: Are uncrystallised funds subject to a lifetime allowance test in the event of the member’s death before age 75?
A
A: Yes, any lump-sum death benefit in respect of uncrystallised funds is subject to a lifetime allowance test in the event of the member’s death before reaching the age of 75, provided the benefits are paid out within the two-year window.
12
Q
Q: Can survivor’s pension or payments under a guarantee be commuted for a lump-sum death benefit?
A
A: Yes, survivor’s pension or payments due under a guarantee can be commuted for a trivial commutation lump-sum death benefit, which cannot exceed £30,000.
13
Q
Q: Can a charity lump-sum death benefit be paid tax-free?
A
A: Yes, a charity lump-sum death benefit can be paid tax-free in certain circumstances if the member has no surviving dependants.
14
Q
Q: Can a dependant receive a continuing income from a scheme pension?
A
A: Yes, a scheme pension may be set up to include a dependant’s scheme pension. Only a dependant can receive a continuing income from a scheme pension.
15
Q
Q: How is the income received by a dependant from a dependant’s scheme pension taxed?
A
A: The income received by a dependant from a dependant’s scheme pension is taxed as pension income via PAYE.
16
Q
Q: Are dependants, nominees, and successors taxed on income received from previously crystallised funds if the previous holder died before age 75?
A
A: No, dependants, nominees, and successors have no tax to pay on income received from previously crystallised funds if the previous holder died before age 75. However, if the income comes from uncrystallised funds, it is paid tax-free only if the funds are designated to provide the income within the two-year period.
17
Q
Q: How is the survivor’s income taxed if the previous recipient died after reaching age 75?
A
A: If the previous recipient died having reached the age of 75, the survivor’s income is taxable as the recipient’s pension income via PAYE.
18
Q
Q: How is the income received by a dependant from a drawdown fund or annuity prior to 6 April 2015 taxed?
A
A: The income received by a dependant from a drawdown fund or annuity prior to 6 April 2015 will continue to be taxed as the dependant’s pension income via PAYE.
19
Q
Q: What is the time frame for distributing lump-sum death benefits to avoid inheritance tax?
A
A: Lump-sum death benefits must be distributed by the pension trust within two years of being informed of the member’s death to avoid inheritance tax.
20
Q
Q: What is primary protection used for?
A
A: Primary protection is used to protect pension savings in excess of £1.5 million as at 5 April 2006.
21
Q
Q: Are benefits above an individual’s personal lifetime allowance taken as a lump sum taxable?
A
A: Yes, any benefits above an individual’s personal lifetime allowance taken as a lump sum are taxable as the recipient’s pension income via PAYE.
22
Q
Q: Can benefits continue to accrue under primary protection after 5 April 2006?
A
A: Yes, under primary protection, benefits can continue to accrue after 5 April 2006.
23
Q
Q: What is enhanced protection used for?
A
A: Enhanced protection was available to protect benefits regardless of their value at 5 April 2006, with no benefit accrual between 6 April 2006 and 5 April 2023. Benefit accrual can restart from 6 April 2023 without enhanced protection being lost.
24
Q
Q: What is the impact of enhanced protection on the lifetime allowance charge?
A
A: Under enhanced protection, the individual is not subject to a lifetime allowance charge regardless of the value of the benefits.
25
Q: What are the three forms of fixed protection?
A: The three forms of fixed protection are fixed protection 2012, fixed protection 2014, and fixed protection 2016.
26
Q: How are benefits protected under fixed protection?
A: Under fixed protection, the member's benefits are protected up to the previous level of the lifetime allowance. For example, under fixed protection 2012, the member's benefits are protected up to a value of £1.8 million.
27
Q: Are the rules for fixed protection similar to those for enhanced protection?
A: Yes, the rules that apply to fixed protection are similar to those that apply to enhanced protection. There must have been no relevant benefit accrual between 6 April 2006 and 5 April 2023, and benefit accrual can restart from 6 April 2023 without fixed protection being lost.
28
Q: What happens if there is relevant benefit accrual after 6 April 2023 for individuals with enhanced protection or fixed protection?
A: If an individual has successfully registered for enhanced protection or one of the fixed protections after 15 March 2023, there must be no relevant benefit accrual on or after 6 April 2023, or the protection will be lost.
29
Q: What is individual protection used for?
A: Individual protection 2014 and individual protection 2016 give the individual a protected lifetime allowance equal to the value of their pension savings on 5 April 2014 or 5 April 2016, respectively, subject to maximum limits.
30
Q: Can further contributions and benefit accrual take place under individual protection?
A: Yes, under individual protection, further contributions can be made and/or further benefit accrual can take place.
31
Q: Can a PCLS (pension commencement lump sum) in excess of 25% of the lifetime allowance be protected?
A: Yes, a PCLS in excess of 25% of the lifetime allowance can be protected, but there are different methods of protecting the entitlement under primary and enhanced protection.
32
Q: Can an individual protect a PCLS that exceeds 25% of the value of the benefits where the benefits are less than the lifetime allowance?
A: Yes, an individual can protect a PCLS that exceeds 25% of the value of the benefits where the benefits are less than the lifetime allowance.
33
Q: Is the fund of a registered pension scheme subject to income tax?
A: No, the fund of a registered pension scheme is free of income tax.
34
Q: Is capital gains tax applicable to gains in a registered pension scheme?
A: No, capital gains tax does not arise on gains in a registered pension scheme. However, there is no allowance for losses.
35
Q: Why are various charges imposed on unauthorised payments from a registered pension scheme?
A: Various charges are imposed on unauthorised payments from a registered pension scheme to prevent abuse of the tax privileges given to such schemes.
36
Q: What is the rate of the unauthorised payments charge?
A: The unauthorised payments charge is levied at a rate of 40%.
37
Q: Who is liable for the unauthorised payments charge if the member is alive when the payment is made?
A: If the member is alive when an unauthorised member payment is made, the member is liable for the charge.
38
Q: Who is liable for the unauthorised payments charge if the payment is made after the death of the member?
A: If the payment is made after the death of the member, the recipient of the payment is liable for the unauthorised payments charge.
39
Q: What is the rate of the unauthorised payments surcharge?
A: The unauthorised payments surcharge is levied at a rate of 15%.
40
Q: Who is liable for the unauthorised payments surcharge if the member is alive when the payment is made?
A: If the member is alive when an unauthorised member payment is made, the member is liable for the surcharge.
41
Q: What is the maximum rate of the scheme sanction charge and who is liable for it?
A: The maximum rate of the scheme sanction charge is 40%, and it is payable by the scheme administrator.
42
Q: What is the de-registration charge and how is it calculated?
A: The de-registration charge is a charge of 40% of the total value of the fund, and it is levied on the scheme upon de-registration.
43
Q: What are the two broad categories of pension schemes set up outside the UK?
A: The two broad categories are qualifying recognised overseas pension schemes (QROPS) and currently relieved non-UK pension schemes. Collectively, they are known as relevant non-UK schemes (RNUKS).
43
Q: What conditions must be satisfied for a recognised overseas pension scheme to be a QROPS?
A: Certain conditions must be met for a recognised overseas pension scheme to be classified as a QROPS. The specific conditions can vary, but typically they include requirements such as reporting obligations, the provision of retirement benefits, and restrictions on early access to funds.
44
Q: Is a transfer to a QROPS considered an authorised payment, and does it have any tax penalties?
A: Yes, a transfer to a QROPS is considered an authorised payment and does not attract any tax penalties. However, it is still treated as a Benefit Crystallisation Event (BCE) for tax purposes.
45
Q: What is the overseas transfer charge, and when does it apply?
A: The overseas transfer charge is a charge of 25% that may apply to transfers from a UK registered pension scheme to a QROPS or in cases of QROPS to QROPS transfers. This charge applies to transfers requested on or after 9 March 2017.
46
Q: Are there any situations where the overseas transfer charge does not apply?
A: Yes, the overseas transfer charge will not apply in certain situations. For example, it will not apply if the QROPS and the individual are resident in the same country.
47
What is the tax treatment of a serious ill-health lump sum if the member is under the age of 75 when the payment is made?
a.
Tax free, with no test against the lifetime allowance.
b.
Tax free up to the lifetime allowance with any excess subject to the lifetime allowance charge of 55%.
c.
Tax free up to the lifetime allowance with any excess taxable as the member's pension income via PAYE.
d.
Taxable as the member's pension income via PAYE, with no test against the lifetime allowance.
c.
Tax free up to the lifetime allowance with any excess taxable as the member's pension income via PAYE.
chapter reference 3A1E
48
Clive died recently at the age of 62. He was survived by his adult non-dependant daughter Lucy and his 16 year old son Max. Lump sum death benefits from his uncrystallised personal pension plan can be paid to:
a.
Lucy only.
b.
Neither of them.
c.
Max only.
d.
Lucy and Max.
d.
Lucy and Max.
chapter reference 3B1A
49
Caitlin, who is 67, has taxable income of £15,000 in 2023/24. She has an uncrystallised personal pension fund of £9,000, which she would like to take as a small pots payment. How much, net of tax, will Caitlin receive?
a.
£7,650.
b.
£5,400.
c.
£9,000.
d.
£7,200.
a.
£7,650.
chapter reference 3A1C
50
What is the tax treatment of a small pots payment made in respect of crystallised benefits?
a.
25% is tax free, with the balance taxed as the member's pension income via PAYE and it is tested against the member's lifetime allowance.
b.
It is taxed as the member's pension income via PAYE and it is not tested against the member's lifetime allowance.
c.
25% is tax free, with the balance taxed as the member's pension income via PAYE and it is not tested against the member's lifetime allowance.
d.
It is taxed as the member's pension income via PAYE and it is tested against the member's lifetime allowance.
b.
It is taxed as the member's pension income via PAYE and it is not tested against the member's lifetime allowance.
chapter reference 3A1C
51
Liz died in July 2023 at the age of 72. Her husband used her uncrystallised personal pension fund to purchase a dependant's annuity in October 2023. The annuity income will be:
a.
tax free and the value of the uncrystallised funds will be tested against Liz's remaining lifetime allowance.
b.
taxed as her husband's pension income via PAYE and there will be no test against Liz's remaining lifetime allowance.
c.
tax free and there will be no test against Liz's remaining lifetime allowance.
d.
taxed as her husband's pension income via PAYE and the value of the uncrystallised funds will be tested against Liz's remaining lifetime allowance.
a.
tax free and the value of the uncrystallised funds will be tested against Liz's remaining lifetime allowance.
chapter reference 3B2C
52
On 5 April 2006 Connor had pension funds valued at £1.55m and an entitlement to a pension commencement lump sum [PCLS] of £400,000. He registered for primary protection. In 2023/24 Connor's pension fund is valued at £1.72m so his maximum permitted PCLS will be:
a.
£430,000.
b.
£480,000.
c.
£375,000.
d.
£450,000.
b.
£480,000.
chapter reference 3C6A
53
What type of pension CANNOT pay death benefits to a nominee?
a.
Lifetime annuity.
b.
Capped drawdown.
c.
Scheme pension.
d.
Flexi-access drawdown.
c.
Scheme pension.
chapter reference 3B
54
An unauthorised payment exceeds 25% of the value of a member's pension rights under a small self-administered scheme. As a result there will be an unauthorised payments surcharge that will be levied at the rate of:
a.
40%.
b.
15%.
c.
25%.
d.
55%.
b.
15%.
chapter reference 3E
55
How are investments that are held within a pension fund taxed?
a.
Income tax will be paid on cash deposits.
b.
Income tax will be paid on trading income.
c.
Capital gains tax will be paid on disposal of assets.
d.
Income tax will be paid on investment income.
b.
Income tax will be paid on trading income.
chapter reference 3D
56
Hugh had pension benefits valued at £1.875m on 5 April 2006 and he registered for primary protection. What is Hugh's personal lifetime allowance in 2023/24?
a.
£2.25m.
b.
£1.875m.
c.
£2.344m.
d.
£1.341m.
a.
£2.25m.
chapter reference 3C1
57
An overseas transfer charge may apply to transfers from a UK registered pension scheme to a QROPS. Where this charge applies, it will be at the rate of:
a.
55%.
b.
40%.
c.
50%.
d.
25%.
d.
25%.
chapter reference 3F1A
58
Why might it NOT be possible for a 62 year old who has a personal pension valued over the current lifetime allowance to apply for individual protection 2016?
a.
They have made contributions into a personal pension plan since 6 April 2016.
b.
They have primary protection.
c.
Their pension savings were valued at £1.35m on 5 April 2016.
d.
The deadline for applying for individual protection 2016 has passed.
b.
They have primary protection.
chapter reference 3C4B
59
A member of a small self-administered scheme has been told that a proposed investment is not permitted because it is deemed to be taxable property. What is the proposed investment?
a.
A commercial property.
b.
Listed company shares.
c.
A residential property.
d.
Shares in the member's own company.
c.
A residential property.
chapter reference 3D
60
Graeme has recently retired and is in receipt of a scheme pension that includes 100% pension protection. To calculate the lump sum payable in the event of his death, the gross income payments received will be deducted from:
a.
20 times the scheme pension in payment on the date of his death.
b.
20 times the initial pension.
c.
25 times the scheme pension in payment on the date of his death.
d.
25 times the initial pension.
b.
20 times the initial pension.
chapter reference 3B1C
61
A member died recently with funds held in capped drawdown. Which death benefit option is NOT available to the member's beneficiaries?
a.
Capped drawdown.
b.
A lump sum.
c.
Flexi-access drawdown.
d.
An annuity.
a.
Capped drawdown.
chapter reference 3B2E
62
In what circumstances, if any, can primary protection be lost?
a.
Contributions are made or benefits continue to accrue after 5 April 2006.
b.
The member's pension is subject to a pension debit after 5 April 2006 and the reduced value of the member's benefits falls below £1.5m.
c.
The member does not crystallise all of their benefits at the same time.
d.
In no circumstances.
b.
The member's pension is subject to a pension debit after 5 April 2006 and the reduced value of the member's benefits falls below £1.5m.
chapter reference 3C5
63
Marcus died in August 2023 at the age of 76. The nominated beneficiary for his unused personal pension fund is his daughter Sally, who takes the entire fund as a lump sum in November 2023. The lump sum death benefit will be:
a.
paid free of tax, but the value of the unused funds will be tested against Marcus' remaining lifetime allowance.
b.
taxable as Sally's pension income via PAYE and there will be no test against Marcus' remaining lifetime allowance.
c.
taxable as Sally's pension income via PAYE and the value of the unused funds will be tested against Marcus' remaining lifetime allowance.
d.
paid free of tax and there will be no test against Marcus' remaining lifetime allowance.
b.
taxable as Sally's pension income via PAYE and there will be no test against Marcus' remaining lifetime allowance.
chapter reference 3B1A
64
A scheme member has been informed they must pay an unauthorised payments surcharge. This is because the unauthorised payments made in the last year exceeded what percentage of the member's pension rights under the scheme?
a.
55%.
b.
40%.
c.
15%.
d.
25%.
d.
25%.
chapter reference 3E
65
Adrian is aged 56 and has a UK defined contribution pension plan with a fund value of £35,000, which the provider pays to him as a one off tax free lump sum payment. What is the most likely reason for this payment?
a.
Adrian now lives overseas.
b.
Adrian has opted for trivial commutation.
c.
The pension fund concerned is a section 32 contract.
d.
Adrian is in serious ill-heath.
d.
Adrian is in serious ill-heath.
chapter reference 3A1E
66
The increase in normal minimum pension age to 57 on 6 April 2028 will have an impact on those born after 5 April:
a.
1978.
b.
1971.
c.
1968.
d.
1973.
d.
1973.
chapter reference 3A
67
Dan designated his personal pension plan into flexi-access drawdown in May 2023. He died in November 2023 at the age of 71. As his nominated beneficiary, his son Elliott, aged 42, elects to designate the funds to a nominee's flexi-access drawdown plan. Any withdrawals Elliott takes will be:
a.
received free of income tax and there will be no test against Dan's remaining lifetime allowance.
b.
received free of income tax and the value of the flexi-access drawdown fund will be tested against Dan's remaining lifetime allowance.
c.
taxed as Elliott's pension income via PAYE and there will be no test against Dan's remaining lifetime allowance.
d.
taxed as Elliott's pension income via PAYE and the value of the flexi-access drawdown fund will be tested against Dan's remaining lifetime allowance.
a.
received free of income tax and there will be no test against Dan's remaining lifetime allowance.
chapter reference 3B2E
68
If a 73 year old died whilst receiving an income from a joint life lifetime annuity, how is the spouse's income taxed?
a.
It is tax free, but there will be a test against deceased's lifetime allowance.
b.
It is taxed as the spouse's income via PAYE and there will be a test against deceased's lifetime allowance.
c.
It is taxed as the spouse's pension income via PAYE, but there is no test against the deceased's lifetime allowance.
d.
It is tax free and there is no test against the deceased's lifetime allowance.
d.
It is tax free and there is no test against the deceased's lifetime allowance.
chapter reference 3B2C
69
Tom, a member of an occupational defined contribution scheme, receives an unauthorised member payment of £50,000. This payment will be subject to an unauthorised payments charge of:
a.
£20,000 payable by the scheme administrator.
b.
£12,500 payable by Tom.
c.
£20,000 payable by Tom.
d.
£12,500 payable by the scheme administrator.
c.
£20,000 payable by Tom.
chapter reference 3E
70
Where a scheme pension is paid directly from a defined contribution arrangement, in what circumstances is the money purchase annual allowance triggered?
a.
Where there are fewer than eleven other members in receipt of a scheme pension and the member became eligible to receive the scheme pension before 6 April 2015.
b.
Where there are more than ten other members in receipt of a scheme pension and the member became eligible to receive the scheme pension before 6 April 2015.
c.
Where there are fewer than eleven other members in receipt of a scheme pension and the member became eligible to receive the scheme pension on or after 6 April 2015.
d.
Where there are more than ten other members in receipt of a scheme pension and the member became eligible to receive the scheme pension on or after 6 April 2015.
c.
Where there are fewer than eleven other members in receipt of a scheme pension and the member became eligible to receive the scheme pension on or after 6 April 2015.
chapter reference 3A2A
71
From which types of pension arrangements can a trivial commutation lump sum be paid?
a.
A defined benefit scheme or an uncrystallised defined contribution fund.
b.
An uncrystallised defined contribution fund or an in-payment money purchase in-house scheme pension.
c.
A defined benefit scheme or an in-payment money purchase in-house scheme pension .
d.
An uncrystallised defined contribution fund or a lifetime annuity payable to a member of a defined contribution scheme.
c.
A defined benefit scheme or an in-payment money purchase in-house scheme pension .
chapter reference 3A1D
72
What is the capital gains tax [CGT] treatment of a share portfolio held within a registered pension scheme?
a.
CGT arises on gains and there is no allowance for losses.
b.
No CGT arises on gains and there is no allowance for losses.
c.
No CGT arises on gains and allowance can be made for losses.
d.
CGT arises on gains and allowance can be made for losses.
b.
No CGT arises on gains and there is no allowance for losses.
chapter reference 3D
73
On 5 April 2006 Jim's pension benefits were valued at £1.7m and he registered for primary protection. However, in 2023/24 Jim's primary protection has been lost. This is because:
a.
Jim has recently divorced and his pension fund was subject to a pension debit of £500,000.
b.
the value of Jim's fund has now fallen below £1.5m.
c.
Jim's employer has put death in service cover in place for Jim.
d.
Jim has started to make contributions into a personal pension plan.
a.
Jim has recently divorced and his pension fund was subject to a pension debit of £500,000.
chapter reference 3C5
74
To avoid them becoming taxable, death benefits from an uncrystallised defined contribution pension must be designated to an income producing contract or paid out as a lump sum death benefit within a certain timeframe. What is this timeframe?
a.
The earlier of two years from the date the scheme administrator is notified of the death, or could reasonably be expected to have known about the death.
b.
Two years from the date of the death.
c.
18 months from the date of the death.
d.
The earlier of 18 months from the date the scheme administrator is notified of the death, or could reasonably be expected to have known about the death.
a.
The earlier of two years from the date the scheme administrator is notified of the death, or could reasonably be expected to have known about the death.
chapter reference 3B
75
What is the tax treatment of a small pots payment paid to a basic rate taxpayer from an uncrystallised pension fund?
a.
The entire payment is taxed as the member's pension income via PAYE.
b.
25% of the payment is tax free, with the balance taxed as the member's pension income via PAYE.
c.
Part of the payment is tax free, with the amount being determined by the rules of the scheme, with the balance taxed as the member's pension income via PAYE.
d.
The entire payment is tax free.
b.
25% of the payment is tax free, with the balance taxed as the member's pension income via PAYE.
chapter reference 3A1C
76
What conditions must apply if an uncrystallised funds pension lump sum [UFPLS] is to be taken after the member reaches the age of 75?
a.
It can be taken from funds that were not crystallised before age 75 or from undrawn funds and the member must have some of their lifetime allowance remaining.
b.
It can only be taken from funds that were not crystallised before age 75 and the member must have some of their lifetime allowance remaining.
c.
It can be taken from funds that were not crystallised before age 75 or from undrawn funds and the member must have enough of their lifetime allowance remaining to cover the full amount of the UFPLS.
d.
It can only be taken from funds that were not crystallised before age 75 and the member must have enough of their lifetime allowance remaining to cover the full amount of the UFPLS.
b.
It can only be taken from funds that were not crystallised before age 75 and the member must have some of their lifetime allowance remaining.
chapter reference 3A1B
77
Q. The maximum scheme sanction charge payable by a scheme administrator is what percentage of the chargeable payment?
a.
40%.
chapter reference 3E
78
How were defined benefit scheme pensions already in payment on 5 April 2006 valued for the purposes of primary protection?
a.
Scheme pension multiplied by a factor of 20.
b.
Scheme pension multiplied by a factor of 20 plus PCLS added at its face value.
c.
Scheme pension multiplied by a factor of 25.
d.
Scheme pension multiplied by a factor of 25 plus PCLS added at its face value.
c.
Scheme pension multiplied by a factor of 25.
chapter reference 3C1
79
If an individual had benefits valued at £2.1m on 5 April 2006 and applied for primary protection, what is their primary protection factor?
d.
40%.
chapter reference 3C1
80
A member with unused defined contribution funds died recently at the age of 77. What rate of tax will be applied to the lump sum death benefit if it is paid to a trustee?
c.
45%.
chapter reference 3B1A
81
Francesco's occupational pension scheme, which offers all of the flexible access options, has a protected pension age of 50. If he decides to take his benefits at age 50, he should be aware that:
a.
his lifetime allowance will be reduced.
b.
he must take all of his benefits from the scheme in full.
c.
he will only be able to draw his income in the form of a lifetime annuity or scheme pension.
d.
he will lose the right to take a pension commencement lump sum.
b.
he must take all of his benefits from the scheme in full.
chapter reference 3A.
82
If a member of an executive pension plan [EPP] had a tax free cash entitlement of 40% of the value of his fund on 5 April 2006, he should be aware that:
a.
if he transfers this plan the higher entitlement will be lost, unless the transfer is part of a bulk transfer or if the EPP is winding up.
b.
when he takes his benefits he will be entitled to a pension commencement lump sum equal to 40% of the value of his fund at that time.
c.
he will need to apply to HMRC so that his higher entitlement will be protected.
d.
he will have the option of using phased flexi-access drawdown with his EPP as long as this option is offered by the EPP provider.
a.
if he transfers this plan the higher entitlement will be lost, unless the transfer is part of a bulk transfer or if the EPP is winding up.
chapter reference 3C6C
83
Apart from taxable property, what type of income within a registered pension scheme is taxable?
a.
Rental income.
b.
Dividend income.
c.
Trading income.
d.
Savings income.
c.
Trading income.
chapter reference 3D
84
Jack will become entitled to a scheme pension from his company's defined benefit scheme on 1 February 2024. Between what dates must the associated lump sum be paid if it is to be considered a pension commencement lump sum?
a.
1 February 2024 and 1 August 2025.
b.
1 August 2023 and 31 January 2024.
c.
1 August 2023 and 31 January 2025.
d.
1 February 2024 and 31 January 2025.
c.
1 August 2023 and 31 January 2025.
chapter reference 3A1A
85
Asif, aged 62, has deferred benefits in a defined benefit scheme with a value for the purposes of trivial commutation of £22,000 and an in payment money purchase in-house scheme pension with a value of £28,000. Which of these arrangements, if any, can he commute for a trivial commutation lump sum payment?
a.
The in payment money purchase in-house scheme pension only.
b.
Both of them.
c.
The defined benefit scheme only.
d.
Neither of them.
d.
Neither of them.
chapter reference 3A1D
86
Lucy had pension rights valued at £2.4m on 5 April 2006 and applied for primary protection. Lucy crystallises her benefits in 2023/24 when they are valued at £3m. By how much, if anything, does the value of Lucy's benefits exceed her personal lifetime allowance?
a.
Nil.
b.
£120,000.
c.
£890,000.
d.
£600,000.
b.
£120,000.
chapter reference 3C1
87
Certain members of occupational pension schemes are entitled to take their benefits from the age of 50 as long as this contractual right was in the scheme rules before what date?
10 December 2003.
chapter reference 3A
88
Who can be included as the contingent interest on a joint life annuity purchased by an individual using uncrystallised funds?
a.
A nominee or a successor.
b.
A dependant only.
c.
A dependant, a nominee or a successor.
d.
A dependant or a nominee.
d.
A dependant or a nominee.
chapter reference 3B2C
