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The Technical Connection Quiz: 23 January

To help you to keep up with the fundamentals of tax, retirement and financial planning, try answering these questions.

The following questions all relate to fixed protection 2014.

QUESTION ONE

Amber has made an election for fixed protection 2014. She is currently a member of her employer’s DB pension scheme. If she is to maintain this, she will have to:

A) Opt out of active membership of the DB pension scheme no later than 5 April 2014

B) Opt out of active membership of the DB pension scheme no later than 6 April 2014

C) Ensure that her pension rights do not increase in value greater than the relevant percentage at any point during each tax year from 6 April 2014

D) Ensure that her pension rights do not increase in value greater than the relevant percentage between 6 April 2014 and the date they are crystallised

QUESTION TWO

Widgets Inc has a number of senior staff members who have decided to elect for fixed protection 2014. The employer is thinking about offering a 5 per cent annual bonus payment for those individuals to help compensate them for no longer benefiting from membership of the company’s qualifying work-place pension. The main issue that Widgets Inc would need to be aware of is:

A) This is a potentially divisive move and could alienate more junior members of staff

B) It could be seen as an “inducement” within PA 2008

C) It could be seen as “anti-competitive” within various EU directives

D) It would need to be subject to a 90 day consultation period with any trade union or staff body representing 10 per cent or more of employees

QUESTION THREE

Brenda has a section 32 buy-out bond that came from a transfer from her former employer’s DB pension scheme. She should be aware that she would invalidate her election for fixed protection 2014:

A) Only if she makes any pension contributions to the section 32 on or after 6 April 2014

B) Only if her pension rights in the section 32 increase in value higher than the relevant percentage on or after 6 April 2014

C) Either if she makes any pension contributions to the section 32 or her pension rights in the section 32 increase in value higher than the relevant percentage on or after 6 April 2014

D) She decides to transfer out of the section 32 other than as a part of a block transfer.

QUESTION FOUR

Where an individual who made an election for fixed protection 2014 loses fixed protection 2014 for any reason they need to report this to:

A) HMRC within 90 days of the event causing the loss of fixed protection occurring

B) HMRC within 90 days of them becoming aware of the event causing the loss of fixed protection occurring

C) HMRC and the scheme administrator within 90 days of the event causing the loss of fixed protection occurring

D) HMRC and the scheme administrator within 90 days of them becoming aware of the event causing the loss of fixed protection occurring

QUESTION FIVE

Failure to notify the loss of fixed protection 2014 will result in a penalty of:

A) Up to £300

B) At least £300

C) Up to £300 and daily penalties of up to £60 per day after the initial penalty is raised

D) At least £300 and daily penalties of up to £60 per day after the initial penalty is raised

Questions supplied by Technical Connection 

Access full CPD, technical updates and business generation ideas throughTechlink Professional. Go to www.techlink.co.uk and click theContact Us link at the top of the screen and then request your free trial from the drop down menu.

_________

Answers

1 C
2 B
3 C
4 B
5 C

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