The Pensions Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006

[F1 Payment and crystallisation valuation U.K.

4ZB.— (1) The member’s funds will be reduced by the amount of the payment set out in regulation 4ZA(3)(a), subject to paragraphs (2) to (4).

(2) Where the payment is the purchase of a dependants’ or nominees’ annuity, the amount of the payment that reduces the member’s funds is the amount of such of the sums and market value of such of the assets applied to purchase the annuity that are unused uncrystallised funds as defined in paragraphs 27E(4) and (5) of Schedule 28.

(3) Where the payment is a—

(a) trivial commutation lump sum,

(b) winding-up lump sum, or

(c) lump sum authorised under regulations 11, 11A or 12 of the Registered Pension Schemes (Authorised Payments) Regulations 2009,

the amount of the payment that reduces the member’s funds is so much of that lump sum as was provided from uncrystallised rights under the scheme.

(4) Where the payment is made pursuant to a pension sharing order or provision, the amount of the payment that reduces the member’s funds is so much of the pension debit that derives from uncrystallised rights as defined by section 212.

(5) For a crystallisation event described in regulation 4ZA(3)(b)(i), the member’s funds are reduced by the aggregate of the amount of the sums and market value of the assets so designated.

(6) For a crystallisation event described in regulation 4ZA(3)(b)(ii), the member’s funds are reduced by the amount of newly-designated dependant funds or newly-designated nominee funds that are unused uncrystallised funds (as defined in paragraphs 27E(4) and (5) of Schedule 28).

(7) Where an individual becomes entitled to a scheme pension the amount of the reduction is—

where P is the amount of the pension which will be payable to the individual in the period of 12 months beginning with the day on which the individual becomes entitled to it (assuming it remains payable throughout that period at the rate at which it is payable on that day).

(8) Where the individual becomes entitled to a dependants’ scheme pension, subject to paragraphs (9) and (10), the amount of the reduction is the aggregate of—

(a) the amount of such of the sums held for the purposes of the pension scheme; and

(b) the market value of such of the assets held for the purposes of the pension scheme

as are applied in (or in connection with) the purchase or provision of a dependants’ scheme pension.

(9) If the dependants’ scheme pension is related to the member’s scheme pension (in accordance with [F2 section 278B]) then the amount of the deduction is nil.

(10) If the dependants’ scheme pension is funded (in whole or in part) by the application of sums or assets representing the whole or part of—

(a) the member’s drawdown pension fund,

(b) the member’s flexi-access drawdown fund,

(c) the dependant’s drawdown fund, or

(d) the dependant’s flexi-access drawdown fund

the aggregate of the amount of those sums and the market value of those assets is to be deducted from the amount found at paragraph (8).]

Textual Amendments

F1 Regs. 4ZA-4ZF inserted (retrospective to 6.4.2017) by The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) (Amendment) Regulations 2018 (S.I. 2018/373), regs. 1, 3, 8

F2 Words in reg. 4ZB(9) substituted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 62(5), 124 (with Sch. 9 paras. 125-132)