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The Technical Quiz: 21 February

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: In England and Wales a divorce may only be granted when a marriage has irretrievably broken down. Breakdown must be evidenced by one of five facts. Which one of the following is not one of those five facts?

A) Adultery

B) Separation for two years with the mutual consent of the parties

C) Separation for four years without the consent of the parties

D) Unreasonable behaviour

QUESTION TWO: Earmarking orders were introduced by

A) Matrimonial Causes Act 1973

B) Matrimonial Proceedings Act 1984

C) Pension Schemes Act 1993

D) Pensions Act 1995

QUESTION THREE: Which one of the following statements is true where pension rights are subject to an Earmarking Order?

A) The earmarked benefit ceases where the ex-spouse/former civil partner remarries/enters a new civil partnership

B) The earmarked benefit automatically ceases where the member remarries/enters a new civil partnership

C) The earmarked benefit must come into payment on the member attaining their State Pension Age

D) The earmarked benefit must come into payment on the member attaining age 75

QUESTION FOUR: Which one of the following would never be included in an earmarking order?

A) An order that a specified percentage of the pension must be paid to the ex-spouse

B) An order that the member must commute their pension for a lump sum up to HMRC limits and pay the ex-spouse all or a percentage of the cash realised

C) An order that the trustees pay a dependant’s pension to the ex-spouse on the member’s death

D) An order over-riding the trustees’ discretion in the payment of lump sum death benefits, so that the ex-spouse receives a payment

QUESTION FIVE: Clarissa (48), who has no pension rights and James (53) who has a SSAS invested in a portfolio of investment trusts valued at £1.9m. They are considering whether an Earmarking Order and a Sharing Order should be made in respect of his pension benefits. He has no transitional protection. Which one of the following statements is correct?

A) Where a pension sharing order is made against James’ SSAS this will result in his benefits being reduced by a Pension Debit, with only the residual benefits being tested against his lifetime allowance. Clarissa will receive a Pension Credit, which will be set against her otherwise unused lifetime allowance.

B) As Clarissa is younger than James, an Earmarking Order will mean that she is guaranteed to receive her pension income earlier than if she was granted a Pension Credit as a result of a pension sharing order against James’ SSAS.

C) A Pension Sharing Order against James’ SSAS means that Clarissa will have to draw her Pension Credit under the SSAS and is unable to transfer her pension credit to another scheme.

D) Clarissa is worried that if she is granted an Earmarking Order, she might not benefit from it if James remarries.

Questions supplied by Technical Connection

_________

Answers

1 C
2 D
3 A
4 C
5 A

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