Finance Act 2004

9 (1) This paragraph applies if any of the individual’s uncrystallised rights on 5th April 2006 are rights under one or more arrangements under a pension scheme or schemes within paragraph 1(1)(a) to (d). U.K.

(2) The value of the individual’s uncrystallised rights on 5th April 2006 under the arrangement, or the aggregate of the values of the individual’s uncrystallised rights on 5th April 2006 under such of the arrangements as relate to a particular employment, is F1 ...—

(a) the value, or the aggregate of the values, calculated under paragraph 8, [F2 or (if lower)]

(b) the amount arrived at in accordance with sub-paragraph (3).

(3) The amount arrived at in accordance with this sub-paragraph is—

where MPP is the maximum permitted pension [F3 as increased, in a case where sub-paragraph (5A) applies, in accordance with sub-paragraph (5B)].

(4) “The maximum permitted pension” means

[F4 (a) in the case of an arrangement under a pension scheme which immediately before 6th April 2006 was within section [F5 611A(1)(a)] of ICTA, the maximum annual pension that could be paid to the individual under the pension scheme on 5th April 2006, and

(b) in any other case,] the maximum annual pension that could be paid to the individual on 5th April 2006 under the arrangement or arrangements if it or they were made under a pension scheme within paragraph 1(1)(a) without giving the Board of Inland Revenue grounds for withdrawing approval of the pension scheme under section 591B of ICTA.

(5) For the purposes of sub-paragraph (4) it is to be assumed—

(a) [F6 in the case of any arrangement, that] if the individual was in the employment to which the arrangement or arrangements relates or relate on 5th April [F7 2006] the individual left the employment on that date, and

[F8 (aa) in the case of an arrangement within sub-paragraph (4)(a), that the valuation assumptions apply (see section 277),]

(b) [F9 in the case of any other arrangement, that] if the individual had not reached the lowest age at which a pension may be paid under a pension scheme within paragraph 1(1)(a) to a person in good health without giving the Board of Inland Revenue grounds for withdrawing the approval of the pension [F10 scheme] that fact would not give the Board such grounds.

[F11 (5A) This sub-paragraph applies where, in the case of an arrangement under a pension scheme which immediately before 6th April 2006 was within section 611A(1)(a) of ICTA—

(a) a lump sum could be paid to the individual on 5th April 2006 under the pension scheme otherwise than by commutation of pension, and

(b) that lump sum could not be exchanged (in whole or in part) for an increased pension.

(5B) Where sub-paragraph (5A) applies, the amount arrived at under sub-paragraph (3) is the aggregate of what it otherwise would be and so much of the amount of the lump sum as could not be so exchanged.]

(6) For the purposes of this paragraph an arrangement relating to an individual relates to an employment if—

(a) the earnings by reference to which benefits under the arrangement are calculated are earnings from the employment, or

(b) the person who is the employer in relation to the employment pays contributions under the arrangement in respect of the individual.

Textual Amendments

F1 Words in Sch. 36 para. 9(2) repealed (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 52(3)(a), 64(1), Sch. 11 Pt. 4

F2 Words in Sch. 36 para. 9(2)(a) substituted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 52(3)(b), 64(1)

F3 Words in Sch. 36 para. 9(3) inserted (retrospective to 6.4.2006) by Finance Act 2006 (c. 25), s. 161(2), Sch. 23 para. 36(2)

F4 Words in Sch. 36 para. 9(4) inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 52(4), 64(1)

F5 Word in Sch. 36 para. 9(4)(a) substituted (retrospective to 6.4.2006) by Finance Act 2006 (c. 25), s. 161(2), Sch. 23 para. 45

F6 Words in Sch. 36 para. 9(5)(a) inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 52(5)(a), 64(1)

F7 Word in Sch. 36 para. 9(5)(a) substituted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 52(5)(a), 64(1)

F8 Sch. 36 para. 9(5)(aa) inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 52(5)(b), 64(1)

F9 Words in Sch. 36 para. 9(5)(b) inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 52(5)(c), 64(1)

F10 Word in Sch. 36 para. 9(5)(b) substituted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 52(5)(c), 64(1)

F11 Sch. 36 para. 9(5A)(5B) inserted (retrospective to 6.4.2006) by Finance Act 2006 (c. 25), s. 161(2), Sch. 23 para. 36(3)