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The Technical Quiz: 26 September

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 pension scheme borrowing and lending.

Question 1: The maximum loan to a sponsoring employer that can be made by a SSAS is:

A) 45% of the fund value plus three time the ordinary annual contributions
B) 50% of the fund value plus three time the ordinary annual contributions
C) 50% of the fund value
D) 75% of the fund value
Question 2: A SIPP owns a property of £150,000, with an outstanding mortgage of £50,000, and an equity portfolio valued at £50,000.  What is the maximum additional borrowing that the SIPP can make?

A) £nil
B) £25,000
C) £50,000
D) £75,000

Question 3: A SSAS has made a loan to a sponsoring employer.  Due to an error, the loan exceeded the maximum for it to be treated as an authorised employer loan by £10,000.  The total assets of the pension scheme are £1m.  The tax consequences of this will be that the:

A) member will be subject to an unauthorised payment charge (40%)
B) member will be subject to an unauthorised payment charge (40%) and the scheme will be subject to a  scheme sanction charge (15%)
C) employer will be subject to an unauthorised payment charge (40%)
D) employer will be subject to an unauthorised payment charge (40%) and the scheme will be subjectt to a  scheme sanction charge (15%)


Question 4: A registered pension scheme is looking to borrow to enable it to purchase some commercial premises. The maximum term, if any, on the borrowing will be:

A) There is no maximum term set in legislation. It is down to a commercial agreement between the lender and the pension scheme
B) To the age at which the eldest member of the scheme attains age 75
C) 25 years
D) 30 years


Question 5: Which one of the following statements concerning borrowing by a pension scheme is not correct? A pension scheme can borrow:

A) for any purpose
B) and use the value of its assets as security for the loan
C) to invest in commercial property, but not to facilitate investment gearing
D) from the scheme member



1 C
2 B
3 D
4 A
5 C



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