R04 Overseas pension schemes: free practice questions

1. Question 1 of 5

   What are relevant non-UK schemes (RNUKS)?

   Option A: Any overseas pension scheme holding UK investmentsOption B: Overseas schemes on an HMRC banned listOption C: QROPS and currently relieved non-UK schemesOption D: UK registered schemes that have non-resident members

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   The answer is C: QROPS and currently relieved non-UK schemes

   RNUKS covers both QROPS, which can receive UK transfers, and currently relieved non-UK schemes, where UK relief has been given since 6 April 2006.

   Why the other options are wrong

   A

   Holding UK assets doesn't make a scheme an RNUKS.

   B

   There's no such banned list definition.

   D

   RNUKS are overseas schemes, not UK ones.

2. Question 2 of 5

   How often must a QROPS re-notify HMRC that it still qualifies?

   Option A: Every five yearsOption B: Every yearOption C: Every three yearsOption D: Every ten years

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   The answer is A: Every five years

   The scheme manager undertakes to report payments, notify HMRC if it stops qualifying and re-notify every five years.

   Why the other options are wrong

   B

   Annual re-notification isn't required.

   C

   The period is five years.

   D

   Ten years is too long.

3. Question 3 of 5

   What is a member's overseas transfer allowance, if they have no protection and have taken no benefits?

   Option A: £1,073,100Option B: £1,800,000Option C: £268,275Option D: Unlimited

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   The answer is A: £1,073,100

   The OTA equals the member's LSDBA: £1,073,100 as standard. A QROPS transfer doesn't reduce the LSA or LSDBA.

   Why the other options are wrong

   B

   £1.8m is a fixed protection 2012 figure.

   C

   £268,275 is the LSA.

   D

   The OTA is limited.

4. Question 4 of 5

   How is LTA used before April 2024 by designating funds into drawdown (BCE 1) treated when working out the OTA?

   Option A: It reduces the OTA by 25% of the LTA that was usedOption B: It doubles the OTA available for the transferOption C: It is ignored, though any PCLS then reduces the OTAOption D: It reduces the OTA in full, like other BCEs

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   The answer is C: It is ignored, though any PCLS then reduces the OTA

   Generally the OTA is reduced by 100% of LTA used, but LTA used by BCE 1 is ignored to avoid testing the same funds twice. Any PCLS taken still counts.

   Why the other options are wrong

   A

   There's no 25% reduction rule for the OTA.

   B

   Nothing doubles the OTA.

   D

   BCE 1 usage is specifically excluded.

5. Question 5 of 5

   Who is liable for an overseas transfer charge?

   Option A: HMRC deducts it from the member's State PensionOption B: The administrator and the member, jointly and severallyOption C: The member only, through self-assessmentOption D: The receiving QROPS only, from the transferred funds

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   The answer is B: The administrator and the member, jointly and severally

   The scheme administrator and the individual are jointly and severally liable for the flat 25% charge.

   Why the other options are wrong

   A

   It isn't collected through the State Pension.

   C

   The administrator is also liable.

   D

   The QROPS isn't the liable party.

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