Retirement Benefits Flashcards
How would a 1 month basis be taxed?
Assumption of ongoing payment
1/12 of the personal allowance
1/12 of the basic rate band
1/12 of the higher rate band, and the rest charged at 45%
What is small pot commutation applied to, and how does it differ from standard commutation?
Both DB and DC schemes
No LSA test
Doesn’t trigger MPAA
What are the limits for small pot commutation?
Limit £10,000 per pension pot
Max 3 non-occupational pension schemes
How is small pot commutation taxed
25% tax free
Taxed under PAYE
What does trivial commutation do?
And how is it taxed?
DB schemes with benefits under £30,000 can commutate into a lump sum.
Not tested against the new allowances.
Not in payment- 25% tax-free
In payment- fully taxed
How is trivial commutation handeld for DC?
Just taken as an UFPlS unless already in payment, then under £30000 can be commutated.
What are the two forms of ill health?
Ill health early retirement
Serious ill health early retirement
What are the rules for ill health early retirement?
Can draw benefits at any age.
Must be unable to do their own job and stopped working
If individual recovers income may stop
What are the rules for serious ill health early retirement?
12 months or less to live
Can take whole pot up to LSDBA tax-free if under 75
Reduces LSDBA availability for dependents when memeber dies
Summarise DB Ill health and death benefits
Summarise Dc Ill health and death benefits
Who may be able to retire before 55
Pre A day
Protected occupation
or
written in contractual right.
What was the LTA reduced by for pensions drawn before 55 and now applied to LSDBA
2.5% per year
based on full years. (After a birthday)
What is protection 28?
The right to still draw a pension at 55 if changed early to 57 if a memeber has an unqualified right to. (Does not require permission)
