Finance Act 2024

Part 6 U.K. Commencement and transitional provision etc

Commencement U.K.

124 The amendments made by section 14 and this Schedule have effect for the tax year 2024-25 and subsequent tax years.

Availability of individual’s lump sum allowance U.K.

125 (1) This paragraph applies where—

(a) one or more benefit crystallisation events within the meaning of Part 4 of FA 2004 occurred in relation to an individual before 6 April 2024, F1 ...

(b) a relevant benefit crystallisation event within the meaning of section 637Q of ITEPA 2003 (availability of individual’s lump sum allowance) occurs in relation to the individual on or after that date[F2 , and

(c) at the time the relevant benefit crystallisation occurs, the individual—

(i) is not an individual to whom paragraph 12 of Schedule 36 to FA 2004 applies (enhanced protection), or

(ii) is such an individual and is not within paragraph 24(1) of Schedule 36 to FA 2004 (persons with lump sum protection).]

F3 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) [F4 The] amount of the individual’s lump sum allowance that is available on the occurrence of the relevant benefit crystallisation event is—

(a) the amount of that allowance that is available in accordance with section 637Q of ITEPA 2003 on the occurrence of that event, less

(b) an amount equal to 25% of the individual’s lifetime allowance previously-used amount;

or, if that produces a negative result, nil.

[F5 (3A) Where—

(a) the individual is an individual to whom paragraph 7 of Schedule 36 to FA 2004 applies (primary protection),

(b) the individual is not within paragraph 24(1) of Schedule 36 to FA 2004 (persons with lump sum protection), and

(c) 25% of the individual’s lifetime allowance previously-used amount is greater than £375,000,

sub-paragraph (3) has effect as if the amount determined under paragraph (b) of that sub-paragraph were £375,000.]

(4) But [F6 sub-paragraph (3) does] not apply if, on the occurrence of the relevant benefit crystallisation event, a transitional tax-free amount certificate is in force in relation to the individual.

(5) In such a case, the amount of the individual’s lump sum allowance that is available on the occurrence of the relevant benefit crystallisation event is—

(a) the amount of that allowance that is available in accordance with section 637Q of ITEPA 2003 on the occurrence of that event, less

(b) the individual’s lump sum transitional tax-free amount;

or, if that produces a negative result, nil.

(6) For provision about the meaning of expressions used in this paragraph, see paragraph 129.

Textual Amendments

F1 Word in Sch. 9 para. 125(1)(a) omitted (with effect in accordance with reg. 1(3) of the amending S.I.) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(3)(a)

F2 Sch. 9 para. 125(1)(c) and word inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(3)(b)

F3 Sch. 9 para. 125(2) omitted (with effect in accordance with reg. 1(3) of the amending S.I.) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(4)

F4 Word in Sch. 9 para. 125(3) substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(5)

F5 Sch. 9 para. 125(3A) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(6)

F6 Words in Sch. 9 para. 125(4) substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(7)

Availability of individual’s lump sum and death benefit allowance U.K.

126 (1) This paragraph applies where—

(a) one or more benefit crystallisation events within the meaning of Part 4 of FA 2004 occurred in relation to an individual before 6 April 2024, F7 ...

(b) a relevant benefit crystallisation event within the meaning of section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance) occurs in relation to the individual on or after that date. [F8 , and]

[F9 (c) at the time the relevant benefit crystallisation occurs, the individual is not an individual to whom paragraph 12 of Schedule 36 to FA 2004 applies (enhanced protection).]

(2) Where the individual’s lifetime allowance previously-used amount is equal to or greater than the individual’s lifetime allowance, none of the individual’s lump sum and death benefit allowance is available on the occurrence of the relevant benefit crystallisation event.

(3) Otherwise, the amount of the individual’s lump sum and death benefit allowance that is available on the occurrence of the relevant benefit crystallisation event is—

(a) the amount of that allowance that is available in accordance with section 637S of ITEPA 2003 on the occurrence of that event, less

(b) an amount equal to the appropriate percentage of the individual’s lifetime allowance previously-used amount;

or, if that produces a negative result, nil.

[F10 (3A) Where—

(a) the individual is an individual to whom paragraph 7 of Schedule 36 to FA 2004 applies (primary protection),

(b) the individual is not within paragraph 24(1) of Schedule 36 to FA 2004 (persons with lump sum protection),

(c) the appropriate percentage is 25%, and

(d) 25% of the individual’s lifetime allowance previously-used amount is greater than £375,000,

sub-paragraph (3) has effect as if the amount determined under paragraph (b) of that sub-paragraph were £375,000.]

(4) In [F11 sub-paragraphs (3) and (3A)] “the appropriate percentage” means—

(a) 100% in a case in which—

(i) the individual becomes entitled to a serious ill-health lump sum before 6 April 2024 and is under the age of 75 at the time of the payment, or

(ii) the individual dies before 6 April 2024 under the age of 75 and [F12 the conditions in sub-paragraph (4A) are met];

(b) 25% in any other case.

[F13 (4A) The conditions mentioned in sub-paragraph (4)(a)(ii) are—

(a) that before 6 April 2024 a person is paid a defined benefits lump sum death benefit, or an uncrystallised funds lump sum death benefit, in respect of the individual,

(b) that the lump sum is paid before the end of the period of two years beginning with the day on which the scheme administrator of the scheme first knew of the individual’s death or (if earlier) the day on which the scheme administrator could first reasonably have been expected to have known of it, and

(c) that the person to whom the lump sum is paid is not a non-qualifying person.]

(5) But sub-paragraphs (2) to [F14 (4A)] do not apply if, [F15 at the relevant time], a transitional tax-free amount certificate is in force in relation to the individual.

(6) In such a case, the amount of the individual’s lump sum and death benefit allowance that is available on the occurrence of the relevant benefit crystallisation event is—

(a) the amount of that allowance that is available in accordance with section 637S of ITEPA 2003 on the occurrence of that event, less

(b) the individual’s lump sum and death benefit transitional tax-free amount;

or, if that produces a negative result, nil.

[F16 (6A) In sub-paragraph (5) “the relevant time” means—

(a) if the relevant benefit crystallisation event is the individual becoming entitled to a relevant lump sum (within the meaning of section 637S of ITEPA 2003), the time at which the individual becomes so entitled;

(b) if the relevant benefit crystallisation event is a person being paid a relevant lump sum death benefit (within the meaning of section 637S of ITEPA 2003), the 31 October next following the end of the tax year in which the relevant lump sum death benefit is paid.]

(7) For provision about the meaning of expressions used in this paragraph, see paragraph 129.

Textual Amendments

F7 Word in Sch. 9 para. 126(1)(a) omitted (with effect in accordance with reg. 1(3) of the amending S.I.) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(9)(a)

F8 Word in Sch. 9 para. 126(1)(b) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(9)(b)

F9 Sch. 9 para. 126(1)(c) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(9)(c)

F10 Sch. 9 para. 126(3A) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(10)

F11 Words in Sch. 9 para. 126(4) substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(11)

F12 Words in Sch. 9 para. 126(4)(a)(ii) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(2)(a)

F13 Sch. 9 para. 126(4A) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(2)(b)

F14 Word in Sch. 9 para. 126(5) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(2)(c)(i)

F15 Words in Sch. 9 para. 126(5) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(2)(c)(ii)

F16 Sch. 9 para. 126(6A) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(2)(d)

Transitional tax-free amount certificates U.K.

127 (1) A “transitional tax-free amount certificate” is a certificate relating to an individual that—

(a) is issued by a [F17 certification administrator,] on an application made in accordance with this paragraph, and

(b) certifies that the [F18 certification administrator] is satisfied as to—

(i) the amount of the individual’s lump sum transitional tax-free amount, and

(ii) the amount of the individual’s lump sum and death benefit transitional tax-free amount.

(2) An application for a certificate in relation to an individual—

(a) may be made by the individual or, if the individual is deceased, the individual’s personal representatives;

[F19 (b) may be made to any person who is a certification administrator in relation to the individual;]

(c) must be accompanied by complete evidence as to the amount of the individual’s lump sum and death benefit transitional tax-free amount;

[F20 (d) may not be made after the individual becomes entitled to a relevant lump sum (within the meaning of section 637S of ITEPA 2003), and

(e) may not be made after the 31 October next following the end of the tax year in which a relevant lump sum death benefit (within the meaning of section 637S of ITEPA 2003) is paid in respect of the individual.]

(3) The [F21 certification administrator to whom] an application is made must, before the end of the period of three months beginning with the date on which the [F22 the application is received], determine the application by—

(a) issuing the applicant with a certificate, or

(b) notifying the applicant that the application is refused.

(4) A certificate must (in addition to certifying the matter mentioned in sub-paragraph (1)(b)) contain the following information—

(a) the individual’s name, address and national insurance number,

(b) the individual’s lifetime allowance previously-used amount expressed as a percentage of the standard lifetime allowance [F23 for the tax year 2023/24],

(c) the amount that the [F24 certification administrator] is satisfied is the individual’s lump sum transitional tax-free amount, and

(d) the amount that the [F25 certification administrator] is satisfied is the individual’s lump sum and death benefit transitional tax-free amount.

(5) A certificate may be in such form as the [F26 certification administrator] may determine and may, in particular, be incorporated into any other document that is given to the applicant [F27 by the certification administrator].

(6) If at any time it appears to [F28 a person who is a certification administrator in relation to the individual] that the amount specified on a certificate under sub-paragraph (4)(c) or (d) does not accurately reflect the individual’s lump sum transitional tax-free amount or (as the case may be) lump sum and death benefit transitional tax-free amount, they must cancel the certificate by giving notice of the cancellation to the applicant or, if the applicant is deceased, the applicant’s personal representatives.

(7) A certificate—

(a) comes into force when it is issued, and

(b) ceases to be in force on the giving of a notice under sub-paragraph (6).

(8) The Commissioners for His Majesty’s Revenue and Customs may by regulations—

(a) amend sub-paragraph (3) by substituting a different period for that for the time being specified there, or

(b) make further provision about transitional tax-free certificates.

(9) For provision about the meaning of expressions used in this paragraph, see paragraph 129.

(10) In the second column of the Table in section 98 of TMA 1970 (penalty for failure to give certificates etc), at the appropriate place insert—

“Paragraph 127 of Schedule 9 to the Finance Act 2024”.

Textual Amendments

F17 Words in Sch. 9 para. 127(1)(a) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(3)(a)(i)

F18 Words in Sch. 9 para. 127(1)(b) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(3)(a)(ii)

F19 Sch. 9 para. 127(2)(b) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(3)(b)(i)

F20 Sch. 9 para. 127(2)(d)(e) substituted for Sch. 9 para. 127(2)(d) (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(3)(b)(ii)

F21 Words in Sch. 9 para. 127(3) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(3)(c)(i)

F22 Words in Sch. 9 para. 127(3) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(3)(c)(ii)

F23 Words in Sch. 9 para. 127(4)(b) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(3)(d)(i)

F24 Words in Sch. 9 para. 127(4)(c) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(3)(d)(ii)

F25 Words in Sch. 9 para. 127(4)(d) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(3)(d)(ii)

F26 Words in Sch. 9 para. 127(5) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(3)(e)(i)

F27 Words in Sch. 9 para. 127(5) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(3)(e)(ii)

F28 Words in Sch. 9 para. 127(6) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(3)(f)

Modifications etc. (not altering text)

C1 Sch. 9 para. 127 applied (with modifications) (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2010/1187, reg. 20 (as inserted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 27(23))

Availability of member’s overseas transfer allowance U.K.

[F29 127A (1) This paragraph applies where—

(a) one or more benefit crystallisation events within the meaning of Part 4 of FA 2004 occurred in relation to an individual before 6 April 2024, and

(b) a transfer of the kind mentioned in section 244IA(1)(a) of FA 2004 is made in relation to the individual on or after that date.

(2) Where the individual’s [F30 adjusted] lifetime allowance previously-used amount is equal to or greater than the individual’s lifetime allowance, none of the individual’s overseas transfer allowance is available on the making of the transfer.

(3) Otherwise, the amount of the individual’s overseas transfer allowance that is available on the making of the transfer is—

(a) the amount of that allowance that is available in accordance with section 244IC of FA 2004 on the making of the transfer, less

(b) the individual’s [F31 adjusted] lifetime allowance previously-used amount,

or, if that produces a negative result, nil.

[F32 (4) In this paragraph “adjusted lifetime allowance previously-used amount” means—

where—

• A is the lifetime allowance previously-used amount;

• B is the aggregate of any amounts included in A that are attributable to the occurrence, before 6 April 2024, of benefit crystallisation event 1.]]

Textual Amendments

F29 Sch. 9 para. 127A and cross-heading inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(12)

F30 Word in Sch. 9 para. 127A(2) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(4)(a)

F31 Word in Sch. 9 para. 127A(3)(b) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(4)(b)

F32 Sch. 9 para. 127A(4) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(4)(c)

Provision of information by individuals to certification administrators U.K.

[F33 127B (1) Sub-paragraph (2) applies where—

(a) a certification administrator issues a transitional tax-free amount certificate, and

(b) there are one or more other certification administrators in relation to the individual to whom the certificate relates.

(2) The relevant person must send a copy of the certificate to each certification administrator within sub-paragraph (1)(b).

(3) Sub-paragraph (2) must be complied with—

(a) before the end of the period of 90 days beginning with the day on which the relevant person receives the certificate, and

(b) before the first day following that on which the relevant person receives the certificate on which a relevant benefit crystallisation event occurs in relation to the individual.

(4) In the case of an obligation under sub-paragraph (2) relating to a pension scheme of which the individual is a member as a result of a block transfer, references in sub-paragraph (3) to the day on which the relevant person receives the certificate are to the later of that day and the day on which the relevant person receives notice of the block transfer.

(5) Sub-paragraph (6) applies where—

(a) a certification administrator cancels a transitional tax-free amount certificate, and

(b) there are one or more other certification administrators in relation to the individual to whom the certificate relates.

(6) The relevant person must send a copy of the notice to each certification administrator within sub-paragraph (5)(b).

(7) Sub-paragraph (6) must be complied with—

(a) before the end of the period of 90 days beginning with the day on which the relevant person receives notice of the cancellation, and

(b) before the first day following that on which the relevant person receives notice of the cancellation on which a relevant benefit crystallisation event occurs in relation to the individual.

(8) In the case of an obligation under sub-paragraph (6) relating to a pension scheme of which the individual is a member as a result of a block transfer, references in sub-paragraph (7) to the day on which the relevant person receives notice of the cancellation are to the later of that day and the day on which the relevant person receives notice of the block transfer.

(9) In this paragraph—

• “block transfer”: a transfer is “a block transfer” in relation to a member of a pension scheme if it involves the transfer, in a single transaction, of all the sums and assets held for the purposes of, or representing accrued rights under, the arrangements under the scheme which relate to the member and at least one other member of the scheme;

• “relevant benefit crystallisation event” has the same meaning as in section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance);

• “relevant person”, in relation to a transitional tax-free amount certificate, means—

  (a)

  the individual to whom the certificate relates, or

  (b)

  if the individual is deceased, the individual’s personal representatives.]

Textual Amendments

F33 Sch. 9 para. 127B and cross-heading inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(5)

Provision of information by scheme administrators to members U.K.

128 (1) A reference in the Provision of Information Regulations to a relevant benefit crystallisation event is, in relation to times before 6 April 2024, a reference to a benefit crystallisation event within the meaning of Part 4 of FA 2004.

(2) Sub-paragraph (3) applies where—

(a) one or more benefit crystallisation events within the meaning of Part 4 of FA 2004 occurred in relation to a member of a registered pension scheme before 6 April 2024, and

(b) it is necessary [F34 for a certification administrator] to determine, for the purposes of any provision of the Provision of Information Regulations as that provision has effect for the tax year 2024-25 or a subsequent tax year, the amount of the member’s lump sum allowance that has been expended by the events mentioned in paragraph (a).

(3) For those purposes, the amount of the member’s lump sum allowance that has been expended by the events mentioned in sub-paragraph (2)(a) is—

(a) if [F35 the certification conditions are met in relation to the determination], so much of the member’s lump sum transitional tax-free amount as is referable to those events;

(b) otherwise, an amount equal to 25% of so much of the member’s lifetime allowance previously-used amount as is referable to those events.

(4) Sub-paragraph (5) applies where—

(a) one or more benefit crystallisation events within the meaning of Part 4 of FA 2004 occurred in relation to a member of a registered pension scheme before 6 April 2024, and

(b) it is necessary to determine, for the purposes of any provision of the Provision of Information Regulations as it has effect for the tax year 2024-25 or a later tax year, the amount of the member’s lump sum and death benefit allowance that has been expended by the events mentioned in paragraph (a).

(5) For those purposes, the amount of the member’s lump sum and death benefit allowance that has been expended by the events mentioned in sub-paragraph (4)(a) is—

(a) if [F36 the certification conditions are met in relation to the determination], so much of the member’s lump sum and death benefit transitional tax-free amount as is referable to those events;

(b) otherwise, an amount equal to the appropriate percentage of so much of the member’s lifetime allowance previously-used amount as is referable to those events.

(6) In sub-paragraph (5)(b) “the appropriate percentage” means—

(a) 100% in a case in which—

[F37 (zi) the amount of the member’s lifetime allowance previously-used amount is equal to or greater than the member’s lifetime allowance,]

(i) the member becomes entitled to a serious ill-health lump sum under the scheme before 6 April 2024 and is under the age of 75 at the time of the payment, or

(ii) the member dies before 6 April 2024 under the age of 75 and [F38 the conditions in sub-paragraph (6A) are met,]

(b) 25% in any other case.

[F39 (6A) The conditions mentioned in sub-paragraph (6)(a)(ii) are—

(a) that before 6 April 2024 a person is paid a defined benefits lump sum death benefit, or an uncrystallised funds lump sum death benefit, under the scheme in respect of the member,

(b) that the lump sum is paid before the end of the period of two years beginning with the day on which the scheme administrator of the scheme first knew of the individual’s death or (if earlier) the day on which the scheme administrator could first reasonably have been expected to have known of it, and

(c) that the person to whom the lump sum is paid is not a non-qualifying person.]

[F40 (6B) In this paragraph “the certification conditions”, in relation to a determination mentioned in sub-paragraph (2)(b) or (4)(b), means the following conditions—

(a) that either—

(i) the certification administrator making the determination has issued a transitional tax-free amount certificate to the member, or

(ii) the member has provided that certification administrator with a copy of a transitional tax-free amount certificate issued to the member by another certification administrator, and

(b) that the certification administrator making the determination—

(i) has not cancelled the certificate, and

(ii) has not been notified that the certificate has been cancelled by another certification administrator.]

(7) In this paragraph “the Provision of Information Regulations” means the Registered Pension Schemes (Provision of Information) Regulations (S.I. 2006/567).

(8) For further provision about the meaning of expressions used in this paragraph, see paragraph 129.

Textual Amendments

F34 Words in Sch. 9 para. 128(2) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(6)(a)

F35 Words in Sch. 9 para. 128(3)(a) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(6)(b)

F36 Words in Sch. 9 para. 128(5)(a) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(6)(b)

F37 Sch. 9 para. 128(6)(a)(zi) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(13)

F38 Words in Sch. 9 para. 128(6)(a)(ii) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(6)(c)

F39 Sch. 9 para. 128(6A) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(6)(d)

F40 Sch. 9 para. 128(6B) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(6)(e)

Modifications etc. (not altering text)

C2 Sch. 9 para. 128 modified (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2010/1187, reg. 21 (as inserted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 27(23))

Paragraphs 125 to 128: interpretation U.K.

129 (1) “Lump sum transitional tax-free amount”, in relation to an individual, means the total of—

(a) each pension commencement lump sum (if any) to which the individual has, before 6 April 2024, become entitled under a registered pension scheme, F41 ...

(b) each uncrystallised funds pension lump sum (if any) to which the individual has, before 6 April 2024, become entitled under a registered pension scheme, so far as no charge to income tax under Part 9 of ITEPA 2003 or Part 4 of FA 2004 arises in respect of it.

[F42 (c) each stand-alone lump sum (if any) to which the individual has, before 6 April 2024, become entitled under a registered pension scheme, so far as no charge to income tax under Part 9 of ITEPA 2003 or Part 4 of FA 2004 arises in respect of it, and

(d) where a benefit crystallisation event within sub-paragraph (2)(a) of paragraph 20 of Schedule 36 to FA 2004 (pre-commencement pensions) was treated as having occurred before 6 April 2024 in relation to the individual, an amount equal to 25% of the amount treated as crystallised by that event under sub-paragraph (2)(b) of that paragraph.]

(2) “Lump sum and death benefit transitional tax-free amount”, in relation to an individual, means the total of—

[F43 (za) the individual’s lump sum transitional tax-free amount,]

(a) each relevant lump sum (if any) [F44 not comprised in the individual’s lump sum transitional tax-free amount] to which the individual has, before 6 April 2024, become entitled under a registered pension scheme, so far as no charge to income tax under Part 9 of ITEPA 2003 or Part 4 of FA 2004 arises in respect of it, [F45 and]

(b) each relevant lump sum death benefit (if any) paid before 6 April 2024 by a registered pension scheme in respect of the individual so far as no charge to income tax under Part 9 of ITEPA 2003 or Part 4 of FA 2004 arises in respect of it, F46 ...

F46 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) For the purposes of sub-paragraph (2)—

(a) a lump sum is “relevant” if the individual becoming entitled to it constituted a benefit crystallisation event within the meaning of Part 4 of FA 2004;

(b) a lump sum death benefit is “relevant” if its payment constituted a benefit crystallisation event within the meaning of Part 4 of FA 2004.

(4) “Complete evidence”, in relation to an individual’s lump sum and death benefit transitional tax-free amount, means evidence of—

(a) each lump sum (if any) to which the individual has become entitled, and

(b) each lump sum death benefit (if any) that has been paid in respect of the individual,

that is comprised, or any part of which is comprised, in the individual’s lump sum and death benefit transitional tax-free amount.

[F47 (4A) “Lifetime allowance previously-used amount”, in relation to an individual, means (subject to sub-paragraphs (4B) and (4C)) the amount that would have been the previously used amount for the purposes of section 219 of FA 2004 (availability of individual’s lifetime allowance) if a benefit crystallisation event (within the meaning of that section) had occurred in relation to the individual immediately before 6 April 2024.

(4B) Sub-paragraph (4C) applies where—

(a) the individual reached the age of 75 before 6 April 2024,

(b) on the individual reaching that age, an amount was, or amounts were, crystallised by one or more of benefit crystallisation events 5, 5A and 5B, and

(c) the individual did not become entitled to a lump sum under a registered pension scheme in the period beginning with the date on which the individual reached the age of 75 and ending with 5th April 2024.

(4C) The amount determined under sub-paragraph (4A) is to be reduced by the amount or (if more than one) the sum of the amounts mentioned in sub-paragraph (4B)(b).]

(5) In paragraphs 125 to 128 and this paragraph—

• [F48 “benefit crystallisation event”, followed by a number, has the same meaning as in Part 4 of FA 2004 (see section 216 of that Act);]

• [F48 “certification administrator”, in relation to an individual, means—

  (a)

  the scheme administrator of a registered pension scheme of which the individual is a member or, if the individual is deceased, of which the individual was a member immediately before death, or

  (b)

  an insurance company to which a registered pension scheme has transferred sums or assets to secure the payment to the individual of a scheme pension or a lifetime annuity;]

• “complete evidence” has the meaning given by sub-paragraph (4);

• [F48 “defined benefits lump sum death benefit” has the same meaning as in Part 4 of FA 2004;]

• [F48 “drawdown pension fund”, in relation to an individual, has the same meaning as in Part 4 of FA 2004 (see Part 1 of Schedule 28 to that Act);]

• [F48 “entitled” (in relation to a lump sum) has the same meaning as in Part 4 of FA 2004;]

• [F48 “insurance company” has the same meaning as in Part 4 of FA 2004;]

• “lifetime allowance” has the same meaning as in Part 4 of FA 2004;

• [F49 “lifetime allowance previously-used amount” has the meaning given by sub-paragraphs (4A) to (4C);]

• “lump sum and death benefit transitional tax-free amount” has the meaning given by sub-paragraphs (2) and (3);

• “lump sum death benefit” has the same meaning as in Part 4 of FA 2004;

• “lump sum transitional tax-free amount” has the meaning given by sub-paragraph (1);

• [F48 “member” has the same meaning as in Part 4 of FA 2004;]

• [F48 “non-qualifying person” has the same meaning as in section 206 of FA 2004;]

• “pension commencement lump sum” has the same meaning as in Part 4 of FA 2004;

• “the Provision of Information Regulations” means the Registered Pension Schemes (Provision of Information) Regulations (S.I. 2006/567);

• “scheme administrator” has the same meaning as in Part 4 of FA 2004;

• “serious ill-health lump sum” has the same meaning as in Part 4 of FA 2004;

• [F50 “stand-alone lump sum” has the meaning given by article 25 of the Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572);]

• “standard lifetime allowance”, in relation to an individual, has the same meaning as in Part 4 of FA 2004 as that Part has effect in relation to the individual;

• “transitional tax-free amount certificate” means a certificate under paragraph 127;

• “uncrystallised funds pension lump [F51 sum]” has the same meaning as in Part 4 of FA 2004.

• [F48 “uncrystallised funds pension lump sum death benefit” has the same meaning as in Part 4 of FA 2004;]

(6) A reference in any of paragraphs 125 to 128 or this paragraph to a provision of FA 2004 is to that provision as it had effect immediately before 6 April 2024.

Textual Amendments

F41 Word in Sch. 9 para. 129(1)(a) omitted (with effect in accordance with reg. 1(3) of the amending S.I.) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(15)(a)

F42 Sch. 9 para. 129(1)(c)(d) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(15)(b)

F43 Sch. 9 para. 129(2)(za) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(7)(a)(i)

F44 Words in Sch. 9 para. 129(2)(a) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(7)(a)(ii)

F45 Word in Sch. 9 para. 129(2)(a) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(7)(a)(iii)

F46 Sch. 9 para. 129(2)(c) omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(7)(a)(iv)

F47 Sch. 9 para. 129(4A)-(4C) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(7)(b)

F48 Words in Sch. 9 para. 129(5) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(7)(c)(ii)

F49 Words in Sch. 9 para. 129(5) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(7)(c)(i)

F50 Words in Sch. 9 para. 129(5) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(17)(a)

F51 Word in Sch. 9 para. 129(5) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(17)(b)

Statements for certain members who would not otherwise receive one in the tax year 2024-25 U.K.

130 (1) The scheme administrator of a registered pension scheme must provide a statement to each relevant person before the end of the tax year 2024-25.

(2) In sub-paragraph (1) “relevant person” means—

(a) any member of the scheme—

(i) in relation to whom one or more benefit crystallisation events occurred before 6 April 2024, and

(ii) who on that date does not have an actual (as opposed to prospective) entitlement to be paid a pension, or

(b) the personal representatives of a member within paragraph (a) who has died.

[F52 (3) The statement must contain the information in regulation 14(3) of the Provision of Information Regulations (percentage of standard lifetime allowance expended by benefit crystallisation events) in respect of benefit crystallisation events occurring before 6 April 2024.]

(4) In this paragraph—

• “benefit crystallisation event” means a benefit crystallisation event within the meaning of Part 4 of FA 2004, as that Part had effect immediately before 6 April 2024;

• [F53 “member” has the same meaning as in Part 4 of FA 2004;]

• “the Provision of Information Regulations” means the Registered Pension Schemes (Provision of Information) Regulations (S.I. 2006/567) [F54 , as those regulations had effect immediately before 6 April 2024];

• “scheme administrator” has the same meaning as in Part 4 of FA 2004.

Textual Amendments

F52 Sch. 9 para. 130(3) substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(19)

F53 Words in Sch. 9 para. 130(4) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(8)

F54 Words in Sch. 9 para. 130(4) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(20)

Lump sums paid on or after 6 April 2024 where entitlement arose before that date U.K.

[F55 [F56 130A (1) The amendments made by or under this Schedule, and the amendments made by section 14, are to be disregarded for the purposes of determining—

(a) the extent (if any) to which a transitional lump sum is a lump sum of a description permitted to be paid by the lump sum rule in section 166(1) of FA 2004, and

(b) the tax treatment under Part 9 of ITEPA 2003 of a transitional lump sum.

(2) In this paragraph “transitional lump sum” means a lump sum to which a member of a registered pension scheme becomes entitled before 6 April 2024 and which is paid on or after that date.

(3) In sub-paragraph (2) “member” has the same meaning as in Part 4 of FA 2004.]]

Textual Amendments

F55 Sch. 9 para. 130A and cross-heading inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(21)

F56 Sch. 9 para. 130A substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(9)

Lump sum death benefits paid on or after 6 April 2024 that crystallised before that date U.K.

[F57 131 (1) The amendments made by or under this Schedule, and the amendments made by section 14, are to be disregarded for the purposes of determining the tax treatment under Part 9 of ITEPA 2003 of a transitional lump sum death benefit.

(2) In section 637S (availability of individual’s lump sum and death benefit allowance), “relevant lump sum death benefit” does not include a transitional lump sum death benefit.

(3) In this paragraph “transitional lump sum death benefit” means a lump sum death benefit paid on or after 6 April 2024 so far as relating to rights that, before that date, crystallised under section 216 of FA 2004.]

Textual Amendments

F57 Sch. 9 para. 131 substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(10)

[F58 Modifications of scheme rules] U.K.

132 [F59 (1)] A rule of a registered pension scheme relating to a member’s entitlement to [F60 , or to the payment of,] a lifetime allowance excess lump sum has effect, in relation to entitlements arising on or after 6 April 2024, and so far as possible, as a rule relating to the member’s entitlement to [F60 , or to the payment of,] a pension commencement excess lump sum.

[F61 (2) The amendments F62 ... made by or under this Schedule [F63 , and the amendments made by section 14,] do not affect the interpretation of any relevant rule of a registered pension scheme.

(3) For the purposes of sub-paragraph (2), a rule of a registered pension scheme is “relevant” if the rule imposes a limit on the amount of a benefit payable under the scheme to, or in respect of, a member by reference to the member’s lifetime allowance, the standard lifetime allowance or the lifetime allowance charge.

(4) In this paragraph [F64 “member”,] “lifetime allowance”, “standard lifetime allowance” and “lifetime allowance charge” have the same meaning as in Part 4 of FA 2004 as that Part had effect immediately before 6 April 2024.

(5) This paragraph ceases to have effect at the end of the tax year 2028-29.]

Textual Amendments

F58 Sch. 9 para. 132 substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(22)

F59 Sch. 9 para. 132 renumbered as Sch. 9 para. 132(1) (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(23)(a)

F60 Words in Sch. 9 para. 132(1) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(23)(b)

F61 Sch. 9 para. 132(2)-(5) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(23)(c)

F62 Words in Sch. 9 para. 132(2) omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(11)(a)(i)

F63 Words in Sch. 9 para. 132(2) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(11)(a)(ii)

F64 Word in Sch. 9 para. 132(4) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17(11)(b)

Continuity of the law U.K.

[F65 132A (1) This paragraph applies where any provision of or made under this Schedule re-enacts (with or without modification) a provision of the pensions tax code that is repealed by or under this Schedule.

(2) The repeal and re-enactment does not affect the continuity of the law.

(3) Anything done (including any subordinate legislation made) or having effect as if done, under or for the purposes of the repealed provision that could have been done under or for the purposes of the corresponding provision of the pensions tax code, if in force or effective immediately before the commencement of that corresponding provision, has effect thereafter as if done under or for the purposes of that corresponding provision.

(4) Any reference (express or implied) in any enactment, instrument or document to a provision of the pensions tax code shall be construed (so far as the context permits) as including, as respects times, circumstances or purposes in relation to which the corresponding repealed provision had effect, a reference to that corresponding provision.

(5) Any reference (express or implied) in any enactment, instrument or document to a repealed provision shall be construed (so far as the context permits) as respects times, circumstances or purposes in relation to which the corresponding provision of the pensions tax code has effect, as being or (according to the context) including a reference to that corresponding provision.

(6) This paragraph has effect subject to any specific transitional provision or saving contained in or made under this Schedule.

(7) In this paragraph a reference to an enactment being repealed includes its being substituted or revoked.

(8) In this paragraph “pensions tax code” means—

(a) Part 4 of FA 2004 (pension schemes) and subordinate legislation made under it, and

(b) Part 9 of ITEPA 2003 (pension income) and subordinate legislation made under it.]

Textual Amendments

F65 Sch. 9 para. 132A and cross-heading inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(24)

Power to make further transitional provision U.K.

133 (1) The Treasury may make transitional, transitory or saving provision (in addition to that contained in paragraphs 126 to 132) in connection with the coming into force of any amendment made by section 14 or this Schedule.

(2) Regulations under this paragraph may—

(a) insert provision into this Part of this Schedule;

(b) amend any provision of paragraphs 126 to 132;

(c) make different provision for different purposes.

Power to make further provision in connection with the abolition of lifetime allowance charge U.K.

134 (1) The Treasury may by regulations make further provision (in addition to that contained in Parts 1 to 5 of this Schedule) in consequence of, or otherwise in connection with, the provision made by sections 18, 19 and 23 of F(No.2)A 2023.

(2) Regulations under this paragraph may—

(a) amend any provision of the Income Tax Acts (including any provision of, or amendment made by, this Schedule);

(b) if made after 5 April 2024, be made so as to have effect for the tax year in which they are made;

(c) make different provision for different purposes;

(d) include transitional, transitory or saving provision.

(3) Regulations under this paragraph that increase any person’s liability to tax may not be made unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, the House of Commons.

(4) No regulations under this paragraph may be made after 5 April 2026.

(5) In sub-paragraph (2) “amend” includes repeal or revoke.