Pensions and Retirement Planning R04 Study Text Quiz
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Questions and Answers

What is the minimum amount that a PCLS must exceed when added to other PCLS drawn in the previous twelve-month period for it to be treated as an unauthorised payment?

  • £15,000
  • £10,000
  • £5,000
  • £7,500 (correct)

    • What is the percentage increase in pension contributions that is considered 'significant' by HMRC?

  • more than 30% of the contributions that might otherwise have been expected (correct)
  • 40% of the contributions that might otherwise have been expected
  • 20% of the contributions that might otherwise have been expected
  • 25% of the contributions that might otherwise have been expected

    • What is the tax implication for an employer who makes a pension contribution on behalf of an employee?

  • The employer must pay VAT on the contribution
  • The employer is eligible for tax relief only up to a certain amount
  • The employer is eligible for tax relief in full (correct)
  • The employer is not eligible for tax relief

    • What is the maximum number of schemes an employer can set up?

    <p>No restriction</p> Signup and view all the answers

    What is the purpose of the tax simplification rules, according to the Government?

    <p>To simplify the tax system</p> Signup and view all the answers

    What is the term used by HMRC to describe a PCLS that meets certain conditions?

    <p>Unauthorised payment</p> Signup and view all the answers

    What is the threshold for the cumulative sum of extra contributions for a PCLS to be treated as an unauthorised payment?

    <p>30% of the PCLS</p> Signup and view all the answers

    Who can make additional contributions to a pension scheme?

    <p>The individual or someone else, such as an employer</p> Signup and view all the answers

    What is the requirement for the employer's contribution to be eligible for tax relief?

    <p>The employer's contribution is paid gross and is allowable as a business expense</p> Signup and view all the answers

    What is the consequence of recycling a PCLS, according to the Government?

    <p>The Government sees it as abuse of the tax simplification rules</p> Signup and view all the answers

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