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The Technical Quiz: 19 September

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

he following questions all relate to flexible drawdown pensions.

QUESTION ONE

To be eligible for flexible drawdown an individual must meet the £20,000 minimum income requirement (MIR)

A) At any point in the tax year in which they move into flexible drawdown, and have received at least one payment of that pension prior to signing the flexible drawdown declaration

B) Prior to the date of signing the declaration for flexible drawdown in the tax year in which the declaration is made

C) In the tax year immediately prior to the tax year in which the flexible drawdown declaration is made

D) In the tax year immediately following the tax year in which the flexible drawdown declaration is signed

QUESTION TWO

For a Scheme Pension to count towards the minimum income requirement (MIR) generally it must be paid from a scheme

A) Which has 20 or more members receiving a scheme pension

B) Which has 12 or more people members a scheme pension

C) Which has 20 or more members receiving a scheme pension, unless it is provided by a policy with an insurance company when the 20 or more member rule does not apply

D) Which has 12 or more members receiving a scheme pension, unless it is provided by a policy with an insurance company when the 12 or more member rule does not apply

QUESTION THREE

To be eligible for flexible drawdown an individual’s contributions (member and/or employer) must not have paid to any money purchase pension scheme

A) In the period up to the date of the flexible drawdown declaration in the tax year in which that declaration is made

B) In the tax year in which the flexible drawdown declaration is made and all subsequent tax years

C) From the date of the flexible drawdown declaration

D) From the date of the flexible drawdown declaration up to the end of the tax year in which that declaration is made

QUESTION FOUR

Is it possible to transfer flexible drawdown rights from one pension scheme to another?

A) No

B) Yes, but only if the new scheme also offers flexible drawdown and the transfer adheres to the Transfer of Sums and Assets Regulations

C) Yes, but the new scheme has to adhere to the Transfer of Sums and Assets Regulations and the individual will then become subject to the capped drawdown income limits in the

new scheme until a new flexible drawdown declaration has been signed

D) Yes, so long as the individual has not attained age 75

QUESTION FIVE

Which one of the following will not count towards the £20,000 minimum income requirement

A) An index-linked lifetime annuity 

B) A scheme pension paid by the National Health Service Pension Scheme

C) A unit-linked annuity

D) Basic state pension

_________

Answers

1 A
2 C
3 A
4 B
5 C

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