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The Technical Quiz: 14 November

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 Primary Protection.


Question 1

Suzie has a valid election for primary protection with an additional lifetime allowance factor of 0.50. Her only previous crystallisation was of pension rights valued at £1.35m during 2010/11 (when the standard lifetime allowance was £1.8m). She is looking to crystallise the balance of her pension rights in March 2014; her lifetime allowance remaining for that crystallisation will be:

A) £900,000

B) £1,350,000

C) £1,080,000

D) £1,575,000

Question 2

Suzie has a valid election for primary protection with an additional lifetime allowance factor of 0.50. Her only previous crystallisation was of pension rights valued at £1.35m during 2010/11 (when the standard lifetime allowance was £1.8m). She is looking to crystallise the balance of her pension rights in May 2014; her lifetime allowance remaining for that crystallisation will be:

A) £756,000

B) £1,080,000

C) £1,575,000

D) £1,762,500

Question 3

Joanne has a Sipp and has a valid election for primary protection. The HMRC certificate shows she has an additional lifetime allowance factor of 0.50. She has pension rights valued at £2.8m which she is intending to fully crystallise on 1 Feb 2014. She has had no previous BCEs. The maximum authorised lump sum benefits she can take at that time is:

A) £375,000 (made up of PCLS of £375,000 only)

B) £450,000 (made up of PCLS of £450,000 only)

C) £420,000 (made up of a PCLS of £375,000 plus a net lifetime allowance excess lump sum of £45,000)

D) £495,000 (made up of a PCLS of £450,000 plus a net lifetime allowance excess lump sum of £45,000)

Question 4

Joanne has a Sipp and has a valid election for primary protection. The HMRC certificate shows she has an additional lifetime allowance factor of 0.50. She has pension rights valued at £2.8m which she is intending to fully crystallise on 1 May 2014. She has had no previous BCEs. The maximum authorised lump sum benefits she can take at that time is:

A) £321,500 (made up of PCLS of £312,500 only)

B) £357,500 (made up of a PCLS of £312,500 plus a net lifetime allowance excess lump sum of £45,000)

C) £450,000 (made up of PCLS of £450,000 only)

D) £495,000 (made up of a PCLS of £450,000 plus a net lifetime allowance excess lump sum of £45,000)

Question 5

The circumstances, if any, that an individual’s primary protection factor can be reduced by HMRC and a new certificate issued are

A) None

B) Application of a pension debit on divorce of the member, only

C) Incorrect A-Day valuation data having been provided to HMRC that needs to be corrected, only

D) Either the application of a pension debit on divorce of the member, or an incorrect A-Day valuation data having been provided to HMRC that needs to be corrected, only

_________

Answers

1 D
2 C
3 C
4 B
5 D

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