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The Technical Quiz: 21 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 flexible drawdown pensions


QUESTION 01

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

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 prior to the tax year in which the drawdown declaration is made

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

QUESTION 02

For a scheme pension to count towards the minimum income requirement 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 members receiving 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 03

To be eligible for flexible drawdown an individual must not have benefited from contributions (member and/or employer) made to any money purchase (DC) pension scheme

A) In the period from the start of the tax year up to the date the drawdown 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 04

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 scheme has to adhere to the Transfer of Sums and Assets Regulations and the individual then becomes subject to the capped drawdown income limits in the new scheme until a new flexible declaration has been signed

D) Yes, so long as the individual is under age 75

QUESTION 05

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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