Not triggering MPAA
- receives a PCLS;
- receives a trivial commutation lump sum;
- receives a small pots lump sum;
- receives a payment from a scheme pension from a defined benefit arrangement;
- receives a payment from a scheme pension paid directly from the funds of a money purchase arrangement where at least eleven other people (including dependants) are receiving a scheme pension paid directly from scheme funds;
- receives a scheme pension secured by way of an annuity from a money purchase scheme of any size;
- is in receipt of a lifetime annuity where payments cannot go down except in prescribed circumstances;
- takes no more than the permitted maximum from a pre 6-April 2015 capped drawdown pension fund; and
- receives a payment from a dependant’s (or nominee’s or successor’s) flexi-access drawdown
Questions - Use Your Note Taker To Jot Down Ideas / Calculations
1. Liam crystallised his personal pension plan in 2018/19 to take advantage of the pension flexibilities. This was the first time he had taken any benefits from his money purchase pension funds. He was NOT subject to the money purchase annual allowance in 2018/19 because he:
Select one:
a) took his pension commencement lump sum, designated the balance into capped drawdown and took an income withdrawal that did not exceed the permitted maximum.
b) took his pension commencement lump sum, designated the balance into flexi-access drawdown but did not take any income withdrawals in 2018/19.
c) used the fund to purchase a flexible annuity.
d) took the entire fund as an uncrystallised funds pension lump sum.
B)
took his pension commencement lump sum, designated the balance into flexi-access drawdown but did not take any income withdrawals in 2018/19.
He has not flexibly accessed his pension benefits as no income has been taken from the flexi access drawdown pot. Remember that taking PCLS is not a trigger for MPAA rules.
2. Brenda has taken her first income withdrawal from a drawdown pension arrangement in 2018/19. However, the money purchase annual allowance has NOT been triggered and this is because:
Select one:
a) the plan was originally a capped drawdown pension, which she has recently converted into a flexi-access drawdown pension.
b) the withdrawal is being taken from a dependant’s flexi-access drawdown fund that she inherited from her late husband.
c) the withdrawal is being paid from a new capped drawdown pension arrangement set up in 2018/19.
d) she is taking the withdrawal from her flexi-access drawdown pension in the form of a short term annuity.
B)
the withdrawal is being taken from a dependant’s flexi-access drawdown fund that she inherited from her late husband.