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The Technical Quiz – March 22

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

Answers can be found at: www.moneymarketing.co.uk/technical

QUESTION 1
A member of a defined-benefit pension scheme has elected for fixed protection. However, he will continue to be an active member of the scheme and will continue to accrue benefits after April 5, 2012. He will no longer be able to maintain fixed protection if his pension rights increase by

A) More than the increase in CPI (in the September prior to the start of the tax year in question) at any point during the tax year in question

B) More than the increase in RPI (in the September prior to the start of the tax year in question) at any point during the tax year in question

C) More than the increase in CPI (in the September prior to the start of the pension input period in question) at any point during the pension input period in question

D) More than the increase in RPI (in the September prior to the start of the pension input period in question) at any point during the pension input period in question

QUESTION 2
Freda completes her election for fixed protection and submits it to HMRC by March 31, 2012. Unfortunately, however, she omitted to sign the declaration. HMRC realise this and return the form to Freda on April 13, 2012.

This means that

A) As the form was incorrectly completed, and the 5 April 2012 deadline has now passed, Freda will not be eligible for fixed protection

B) Freda will have four weeks from April 13, 2012 to re submit the correctly completed election form to HMRC to remain able to elect for fixed protection

C) Freda will have 30 days from April 13, 2012 to re submit the correctly completed election form to HMRC to remain able to elect for fixed protection

D) Freda will have 90 days from April 13, 2012 to re submit the correctly completed election form to HMRC to remain able to elect for fixed protection

QUESTION 3
Damian elected for fixed protection in January 2012, However, employer pension contributions continued to be paid to his DC pension scheme after April 5, 2012, resulting in the loss of such protection. By when must Damian notify HMRC of the loss of this protection? And what will be the penalties for any delay in his notification?

A) HMRC must be informed within 30 days of fixed protection being lost or there is a penalty of £500 plus up to £10 for each subsequent day’s delay

B) HMRC must be informed within 30 days of fixed protection being lost or there is a penalty of £300 plus up to £60 for each subsequent day’s delay

C) HMRC must be informed within 90 days of fixed protection being lost or there is a penalty of £500 plus up to £10 for each subsequent day’s delay

D) HMRC must be informed within 90 days of fixed protection being lost or there is a penalty of £300 plus up to £60 for each subsequent day’s delay

Questions supplied by Technical Connection

Answers;A, B, D

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