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The Technical Quiz: 16 May

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

The Technical Quiz MM 480

QUESTION ONE: Which one of the following would not constitute an authorised member payment, where paid from a DB scheme

A) Dependants’ drawdown pension

B) Dependants’ scheme pension

C) Defined benefits lump sum death benefit

D) Trivial commutation lump sum death benefit

QUESTION TWO: Which one of the following statements regarding a dependant’s scheme pension is not correct?  A dependants’ scheme pension

A) Does not have to be paid for the life of the dependant

B) Cannot be guaranteed for a minimum payment period

C) May not normally be reduced in payment

D) Can include pension protection enabling a limited lump sum death benefit to be paid on the dependant’s death.

QUESTION THREE: A dependants’ scheme pension may

A) Be guaranteed for a term certain not exceeding 5 years

B) Be guaranteed for a term certain not exceeding 10 years

C) Be guaranteed for a term certain not exceeding age 75

D) Not be guaranteed for a term certain

QUESTION FOUR: David is in receipt of a scheme pension from his former employer’s DB scheme when he dies at age 72. Which one of the following statements is not correct in respect of the benefits that can be paid from the DB scheme under the current HMRC rules? The scheme can

A) Provide a dependant’s scheme pension to any dependants’ of David

B) Continue payments of pension under any term-certain period of guarantee that remains

C) Continue payments of pension under any term-certain period of guarantee that remains, but only until David would have attained age 75

D) Pay a defined benefits lump sum death benefit or a pension protection lump sum death benefi

 

QUESTION FIVE: Which one of the following statements is not true in respect of the ongoing instalments of pension that continue to be paid where a member with a scheme pension has died before the end of the guaranteed payment period

A) The payments will not be subject to IHT where they are paid as of right to the deceased’s personal representatives

B) If the payments are paid under trustees discretionary powers, they will not be subject to IHT

C) The continuing payments for the balance of the guarantee period are taxable as pension income on the recipient through PAYE

D) The remaining instalments of the guarantee period can be stopped before the end of that period if the recipient remarries

Questions supplied by Technical Connection

_________

Answers

1 A
2 D
3 D
4 C
5 A

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