01 September 2013

Pensions tax relief (UK Finance Act 2013)

In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again.

  1. What is the annual allowance for 2013-14?

  2. A person has made pension savings of GBP54,000 for 2011-12, GBP13,000 for 2012-13, but was not a member of a pension scheme for 2010-11. The pension input period ends on 5 April. What is the maximum pension saving that can be made for 2013-14 without incurring an annual allowance tax charge?

  3. In what order are annual allowances used?

  4. A person has two pension arrangements. The first scheme has a pension input period ending on 31 May, and the second has an input period ending on 31 January. Which input periods are relevant for 2013-14?

  5. A self-employed person makes regular contributions into a personal pension scheme on the 15th of each month. The scheme's pension input period ends on 31 December. Gross contributions of GBP1,200 per month were made during the year ended 31 December 2013, and contributions of GBP1,300 per month will be made during the year ended 31 December 2014. On what amount of pension savings will tax relief be given for 2013-14?

  6. An employee is a member of a final salary scheme that will provide him with a pension of 1/40th of salary for each year of service. The pension input period ends on 31 January. On 31 January 2014 the employee's salary was GBP84,000 and he had 14 years of service. What is the closing value of the pension for the input period ended 31 January 2014?

  7. An employee is a member of a final salary scheme. The pension input period ends on 5 April. On 6 April 2013 the notional capital value of the pension is calculated at GBP435,700, and at 5 April 2014 it is calculated at GBP492,200. The 12 month increase in the Consumer Price Index for September 2012 is 2.2 percent. What is the employee's pension savings for annual allowance purposes for 2013-14?

  8. An annual allowance tax charge is at what rate of tax?

  9. A person will make pension savings of GBP134,000 for 2013-14. For each of the previous six years the pension savings have been GBP35,000 per year. The pension input period ends on 5 April. What is the amount of surplus subject to an annual allowance tax charge in 2013-14?

  10. A person has a pension scheme where the most recent pension input period ended on 31 May 2013. That person now wants to change their pension input period. Which one of the following pension input periods will be permitted?

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