CII R04 Exam Guide question help

knowR0 · July 15

As usual at this time of year, we are in 'discussions' with the CII about a few of their new Exam Guide questions. They've agreed to amend a couple of things we've pointed out, but are sticking to their guns with one new R04 question. We're looking for some expert help to either support us, or confirm their view!

This is the question (after they've agreed to change some of the question stem text):
Steve is in capped drawdown, with a maximum income of £20,000 per year available to him. For the purpose of calculating Steve’s available Lump Sum and Death Benefit Allowance (LSDBA), what is the value attributed to his capped drawdown?

Their correct answer is £400,000.

We understand how they arrive at this deemed overall capital value (£20,000 x 25 x 80%) = £400,000.
However, our main query is:

if you're calculating the plan to get the available LSDBA, wouldn't you want the deemed tax free sum (£100,000) as opposed to the deemed overall value?

Any views greatly appreciated; we'll accept we need to wind our neck in if that is the general consensus!