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The Technical Quiz: 9 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: Under HMRC’s rules, the maximum defined benefits lump sum death benefit that can be paid under a DB scheme is

A) A multiple of 4 X salary paid in the 12 months immediately prior to death

B) A multiple of 4 X remuneration paid in the 12 months immediately prior to death

C) An unlimited lump sum can be paid

D) A lump sum, up to the deceased member’s remaining lifetime allowance

QUESTION TWO: Under HMRC’s rules, a defined benefits lump sum death benefit can be paid

A) At any age/time

B) Only where a member has not attained the scheme’s NRD

C) Only where a member hasn’t crystallised their benefits under the scheme

D) Only prior to the member attaining age 75

QUESTION THREE: Under HMRC’s rules, and ignoring charities, a defined benefits lump sum death benefit can be paid to

A) Any individual

B) Only a family member of the deceased member

C) Only a dependent of the deceased member

D) Only a financial dependent of the deceased member

 

QUESTION FOUR: Where a defined benefits lump sum death benefit is paid in respect of a member who died aged 75 or over the responsibility for paying the tax due is

A) The trustees of the registered pension scheme paying the benefits

B) The administrator of the registered pension scheme paying the benefits

C) The recipient of the defined benefits lump sum death benefit

D) A), B) and C) above, jointly and severally

QUESTION FIVE: A defined benefits lump sum death benefit is liable to tax at 55% in which one of the following situations?

A) The member dies on or before age 75

B) The member dies before the scheme’s NRD

C) The member dies before crystallising their benefits under the scheme

D) The member dies on or after age 75

Questions supplied by Technical Connection

_________

Answers

1 C
2 A
3 A
4 B
5 D

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