Chapter 3 - Benefits, Reliefs And Overseas Schemes Flashcards
When must the PCLS payment be made?
Within 6 months before and 12 months after the member becomes entitled to the ‘relevant pension’
What is the UFPLS?
Uncrystallised Funds Pension Lump Sum, and is when a member accesses their DC funds as a lump sum, taking a UFPLS is a trigger for the MPAA rules
What are the two ways registered pension schemes pay income?
Secured Pension: Where income is secured either through a scheme pension or by buying an annuity, does not trigger the MPAA
Drawdown Pension: Where the income is drawn directly from the pension fund
What is a 2 year window in respect of death benefits?
Is the 2 years from when the pension scheme is notified of death, the pension benefits must be designated to an income producing contract or paid out as a lump sum
What is an unauthorised payments charge?
An 40% income tax charge applied to an unauthorised payment, such as a PCLS payment in excess of 25%
Why might someone applying for fixed protection 2016 in 2022/23 be told they are ineligible?
They already have enhanced protection
Will shares held in a SIPP pay CGT?
No they won’t
James died having nominated a charity to receive the funds held in his drawdown pension plan. Why was the scheme administrator unable to pay the funds to the nominated charity?
James was survived by his wife
How is a trivial commutation lump sum taxed?
First 25% is tax free
75% at marginal rate
If someone dies after age 75, will death benefits be tested against the LTA?
No, as the test would’ve been made when they reached aged 75
If HMRC withdraws registration from a registered pension scheme, then a deregistration income tax charge will be levied, at what rate?
It will be levied at 40% on all assets
When funds are transferred from a UK pension scheme to a QROPS, what charge will be levied on this transfer?
25% on any assets in excess of the LTA
A basic condition of an overseas pension scheme becoming a QROPS is…
It must have a double taxation agreement in place with the UK
If a sportsman retires at 35, at what rate will their annual allowance reduce until they reach normal retirement age?
It will reduced at 2.5% P.A
Fixed protection 2016 increases the LTA to…
£1.25m
