1 - Income Tax (F)

Question 1

What are the 3 ways in which pension contributions can be tax relievable, and give examples of each.

Answer 1

• relief at source (contribution to SJP pension)
• net pay arrangement (workplace pension); or
• relief by making a claim.

Question 2

Relevant UK individuals who have no relevant UK earnings can contribute up to how much in a registered pension scheme?

Answer 2

£3,600 gross

Question 3

Which 2 conditions could be met for an individual to be a relevant UK individual?

Answer 3

– have relevant UK earnings for the year;
AND
– are resident in the UK at some time in the tax year
OR
– were resident in the UK at some time during the five previous tax years and were UK resident when they joined the pension scheme.

Question 4

What is the maximum tax relief available on pension contributions?

Answer 4

£60,000

Question 5

When does the annual allowance become tapered and by how much?

Answer 5

When income is over £260,000, reduced by £1 for every £2 exceeded.

Question 6

For how long can the annual allowance be carried forward for if not used in full during the tax year?

Answer 6

3 years, but only if you were a member in those previous years otherwise the allowance is lost

Question 7

When did retirement annuity contracts stop and why?

Answer 7

1 July 1988
Replaced by personal pensions

Question 8

How much were you once able to put into a retirement annuity contract?

Answer 8

100% of UK relevant earnings

Question 9

How is tax relief given on:
1. Personal pensions
2. Occupational schemes
3. Retirement annuities

Answer 9

1. personal pensions: paid net, with tax bands extended by gross contributions;
2. occupational schemes: deducted from employment income; and
3. retirement annuities: deducted from total income.

Question 10

What is the maximum age to be able to pay in contributions to a pension?

Answer 10

Must be under 75