R04 Transitional reliefs and protections: free practice questions

1. Question 1 of 5

   Who could register for primary protection?

   Option A: People with savings over £1.5 million on 5 April 2006Option B: People with savings over £1.25 million on 5 April 2014Option C: People with savings of over £1.8 million on 5 April 2012Option D: Anyone with pre-A-Day pension rights of any value at all

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   The answer is A: People with savings over £1.5 million on 5 April 2006

   Primary protection was for those with total savings above the A-Day LTA of £1.5 million on 5 April 2006. It allowed further accrual.

   Why the other options are wrong

   B

   That describes individual protection 2014.

   C

   Fixed protection 2012 didn't depend on a £1.8m threshold.

   D

   Any value of pre-A-Day rights qualified for enhanced protection, not primary.

2. Question 2 of 5

   What is the LSDBA for someone with enhanced protection?

   Option A: £1.5 million plus 25% for each year since 2006Option B: Their uncrystallised rights on 5 April 2024Option C: £1.8 million, as for fixed protection 2012Option D: The value of all their rights on 5 April 2006

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   The answer is B: Their uncrystallised rights on 5 April 2024

   With enhanced protection, the LSDBA equals uncrystallised rights on 5 April 2024, and earlier crystallisations aren't deducted.

   Why the other options are wrong

   A

   That isn't how enhanced protection works.

   C

   £1.8m is the fixed protection 2012 LSDBA.

   D

   The 2006 value isn't used for the LSDBA.

3. Question 3 of 5

   Max's savings were £1.36 million on 5 April 2014 and he holds individual protection 2014. What are his LSA and LSDBA?

   Option A: £312,500 and £1.25 millionOption B: £268,275 and £1,073,100Option C: £375,000 and £1.5 millionOption D: £340,000 and £1.36 million

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   The answer is D: £340,000 and £1.36 million

   The relevant amount is the 5 April 2014 value (between £1.25m and £1.5m): £1.36m. The LSA is 25% of that: £340,000.

   Why the other options are wrong

   A

   £1.25m is the minimum relevant amount.

   B

   Protection gives him more than the standard figures.

   C

   £1.5m is the cap, which applies only to higher values.

4. Question 4 of 5

   How is fixed protection affected when the member is subject to a pension debit?

   Option A: It is not affectedOption B: Its LSA is halvedOption C: It becomes individual protectionOption D: It is lost

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   The answer is A: It is not affected

   A pension debit doesn't affect fixed or enhanced protection. Individual and primary protection are recalculated.

   Why the other options are wrong

   B

   There's no halving rule.

   C

   It doesn't convert.

   D

   Fixed protection isn't lost because of a pension debit.

5. Question 5 of 5

   When is it worth applying for a transitional tax-free amount certificate?

   Option A: When cash taken before April 2024 was under 25% of LTA usedOption B: When the member always took full tax-free cash at a high LTAOption C: When the member has never taken any benefits at allOption D: Only where the member also holds primary protection

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   The answer is A: When cash taken before April 2024 was under 25% of LTA used

   A TTFAC reduces the allowances by actual tax-free amounts taken. It helps where less than 25% of LTA used was taken as tax-free cash.

   Why the other options are wrong

   B

   Someone who took full cash at a higher LTA usually won't benefit.

   C

   Someone who has never crystallised won't benefit.

   D

   Protection isn't required.

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