25. PENSION SCHEMES

Question 1

what are teh different types of pension scheme

Answer 1

occupation - work
personal

Question 2

max tax-free contribution to pension scheme

Answer 2

3600 or 100% of relevant earnings if higher

Question 3

what is the annual allowance for tax free contribution

Answer 3

60k - assuming no tapering

Question 4

how many years can you bring forward unused allowance

Answer 4

previous three years

Question 5

what is minimum annual allowance

Answer 5

10k

Question 6

what is threshold income

Answer 6

check that employer contribution to pension scheme isn’t skewing - so no reference to that

Salary
- personal contribution to occupational pension scheme
+ other income sources (interest/dividends)
= threshold income

Question 7

what is adjusted income

Answer 7

after threshold income calculations, then can now income employer contribution to ensure that employee isn’t being benefited by large employer contributions

Salary
+ Employer contributions to occupational pension scheme
+ other income sources
= adjusted income

Question 8

what is annual allowance charge

Answer 8

(total pension contributions - annual allowance) x marginal tax rate

Question 9

what are stages for working out if tapering of allowance is needed

Answer 9

1. threshold income (>200k)
2. adjusted income (>260k)

Question 10

what is tapering adjustment

Answer 10

adjusted income - 260k
£1 for every £2