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CII > R04 > Flashcards

R04 Flashcards

1
Q

Autoenrolment introduced when? Single SP?

A

2012
2016

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2
Q

Pension Minimum Funding?
PPF formed?

A

1995
2004

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3
Q

A-Day?
Main Changes?

A

04/2006
ATAC
- Allowances: LTA, AA
- Tax Regime simplified
- Annuity Avoidance/Alternatives
-Concurrency: Personal & Occupational

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4
Q

Annuities increase by 3% for each?

A

+30 basis points in GILTs

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5
Q

Financial Advice exempt from IT/NICs up to?
Pensions advice allowance?

A

£500
£500, on max x3 occasions

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6
Q

DB Pension benefits depend on?

A

Time Served
Renumeration
Accrual Rate

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7
Q

Tax regime for ‘registered schemes outlined in?

A

Pensions Tax Manual

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8
Q

To qualify for tax relief must be?

A

<75 +
Relevant Earnings
Resident in UK (Or prior 5yrs)

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9
Q

Net Pay Method?

A

PCs before IT deducted (IT on ‘Net’ amount)

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10
Q

Relief at Source?

A

PCs paid after BR tax, further relief claimed for HR/AR

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11
Q

Self-Ax Tax deadlines?

A

End of Jan: 50%
End of July: 50%
Following End of jan: Balancing Payments

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12
Q

Salary Sacrifice useful as?

A

Reduced NICs, could be recycled. May return allowances.

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13
Q

General Recycling PCLS rules?

A

Subsequent higher PC, or, additional PCs >30% PCLS.
Pre-Planned
PCLS + Prev PCLSs in 12 mths >£7500 since 2015 (1% SLA Pre-2015)

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14
Q

6 PCLS Recycling Rules?

A
  1. Receives PCLS
  2. PCLSs >£7500
  3. PCs in 12 mths >30% PCLS
  4. Paid by Individual/Employer/Party
  5. PCs >Expected due to PCLS
  6. Pre-Planned
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15
Q

PCLS Recycling: Additional PCs exceeds 30% PCLS terms?

A

Relevant Tax year + 2yrs Pre- and Post-PCLS

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16
Q

PCLS Recycling: PCs greater than expected terms?

A

Does not count if individual does not have control e.g. employer increases PCs across the board.

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17
Q

Spreading of large ‘non-regular’ employer PCs if?

A
  • If >210% vs prev chargeable period.
  • Relevant excess (XS over 110% prev chargeable period) is >£500,000
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18
Q

Employer PCs: ‘Relevant Excess’ spreading periods?

A

£0.5-£1m: 2yrs
£1-£2m: 3yrs
>£2m: 4yrs

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19
Q

Annual Allowance?
Carry forward?
Tapering rules?

A

£60k
3yrs
Adjusted Income >£260k: Reduced by £1 for every £2, to £10k (£360k)
Threshold income: Full AA if <£200k

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20
Q

AA: Adjusted Income?
Threshold Income?
Protects who?

A

Total income + PCs
Total income - PCs
‘Lower’ salaries with spikes in PCs

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21
Q

Charge for exceeding AA?

A

XS over AA added to taxable income to determine relevant rate for excess.

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22
Q

AA: Elect for scheme pays if?
With?

A

> £60k (Even if tapered/MPAA)
£2k
Relevant reduction in pension.

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23
Q

Result of MPAA being triggered?

A

Only £10k in to DC scheme.
Keep £60k AA - for DBs.
No carry forward.

24
Q

MPAA triggered when?

A

Pension flexibly accessed:
- UFPLS
- FAD
- Flexi-Annuity
- Exceeding Cap on Capped Drawdown

25
Q

MPAA not triggered when?

A

TFC
‘Secure income’: DB/Annuity
Capped Drawdown
Small Pots
Survivors Pensions

26
Q

MPAA tiggered at:
1. Start + Subsequent <£4k?
2. Start + Subsequent >£4k?
3. Later?

A
  1. Standard AA.
  2. Alt AA £50k (AA-MPAA). Savings tested against MPAA not AA.
  3. DC input after date tested against MPAA
    - DC As per Contributions
    - DB As per time
27
Q

DC savings exceed MPAA?

A

Higher of?
Default Chargeable Amount: Input - AA
Alt Charge: (DB-Alt AA) + (DC-MPAA)

28
Q

Working out DB PCs?

A

‘Pension Input Amount’: Closing Value - Opening Value

29
Q

DB AA: Opening Value? Closing Value?

A

O: Pension x 16 x CPI
C: Yrs Pension Increase x 16

30
Q

LSDB when member dies >75?

A

Taxed at marginal rate.

31
Q

Pre-2015 ‘Flexible Drawdown’?

A

No limit to income if taking secure income.

32
Q

Pre-24 if exceeded LTA?

A

25% charge on XS used for income
55% charge on XS used for LS

33
Q

LTA: Benefits paying Pre-A Day tested how?
‘Flexible Drawdown’ after 2014?
Capped after 2015?

A

25x Yrly pension at first BCE.
25x 80% Max Yrly Pension (Max Capped amount 150% GAD Basis)

34
Q

‘Two year window’ applies to?

A

When death benefits must be ‘designated’ to income.

35
Q

Normal pension age? Increases to?

A

55
58

36
Q

Commuting Pensions for Cash:
Small Pots?
DB Schemes can use?
Occupational Schemes

A

Small Pot LS <£10k
Trivial Commutation LS <£30k
Winding-Up LS

37
Q

Small Pot rules?

A

PPs: Arrangement <£10k, Stop all rights under arrangement, Payable up to x3.
Occ Ps: SCHEME <£10k, No Limit to use, No Transfers out within 3yrs

38
Q

Can take trivial commutation LS if ? <£30k

A

DB arrangements, IPMPISP

39
Q

Tax of:
Small Pots?
Trivial?

A

SP: Crystallised as income, Uncrystallised as 25% TFC, 75% income.
Trivial: 25% TFC, 75% income
- If Scheme Pensions: as income

40
Q

Scheme pension from DC only triggers MPAA if?

A

<11 others entitled

41
Q

PAYE on Flexible Payments usually starts with?

A

‘Month One’ basis: taxed as a monthly payment e.g. 1/12th BR Band.

42
Q

‘Unused Funds’ are?

A

Funds not crystallised by age 75, may have been LTA tested.

43
Q

Pension/Annuity Protection LD Death Benefit?

A

Pension x20, or, Lifetime Annuity Amount

44
Q

Trust Special LS Death Benefit Charge?

A

45%

45
Q

What are Retirement Annuity Contracts?

A

Personal Pension Plans starting pre-1988.

46
Q

Main benefits of Small Pots Payment?

A

Does not trigger MPAA.
Was never tested against the MPAA.

47
Q

Primary Protection?
DB value?
Can still contribute?
Deadline for application?

A

Protects against LTA if >£1.5m in 2006 (Allows 25% £1.5m)
20:1 (Though 25:1 if in payment)
Yes
2009

48
Q

Primary Protection Factor? Calculated how?

A

% by which benefits exceed £1.5m.
(2006 Pension - £1.5m)/£1.5m

49
Q

How to work out Primary Protection amount?

A

PPF x Underpinned LTA (£1.8m)

50
Q

Enhanced Protection?
Ongoing PCs?
Deadline?

A

No min on A day.
No further PCs.
25% of £1.5m
2009
BEST TYPE

51
Q

Types of protection?

A

Fixed x3
Individual x2

Primary
Enhanced
Scheme Specific

52
Q

Scheme Specific LS Protection?

A

> 25% LS Rights on A Day, automatically protected.
Lost if transferred (Unless block).
Lost if does partial crystallisation.

53
Q

Primary /Enhanced+ LS Protection?
Expressed as?

A

LS Rights on A Day >£375k
and
Primary: Monetary Amount
Enhanced: %

54
Q

Fixed Protections?
Ongoing PCs?
Deadlines?

A

No ongoing PCs.
FP12: £1.8m - 2012
FP14: £1.5m - 2014
FP16: £1.25 - None, but no further PCs

55
Q

Individual Protections? Ongoing PCs?

A

Funds above Standard LTA on date. Protected to lower of pension savings or max level.
Yes
IP14 - Min £1.25 - Prot £1.5m - 2017
IP16 - Min £1m - Prot £1.25 - None

56
Q

How does splitting/sharing affect Primary Protection?

A

Pension Debit subtracted from Pension. If new LTA <£1.5m, protection lost.

57
Q
A

CII (3 decks)

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