The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023

Trivial commutation lump sum: additional lump sum paid for deceased member U.K.

25.—(1) Paragraphs (2) to (5) apply where—

(a) an individual (“P”) has been paid a trivial commutation lump sum (“the original TCLS”);

(b) as a result of a relevant rectification provision P, or P’s personal representatives, have acquired rights under a registered pension scheme,

(c) P dies without having received benefits in respect of the rights,

(d) a lump sum (“the top-up lump sum”) is paid to P’s personal representatives, and

(e) the top-up lump sum would have been a trivial commutation lump sum if—

(i) P had still been living when it was paid, and

(ii) it had been paid to P.

(2) In determining whether the condition in paragraph (1)(e) is met, the following provisions of paragraph 7 of Schedule 29 to FA 2004 (trivial commutation lump sum) are to be disregarded—

(a) sub-paragraph (1)(a) (requirement that no previous trivial commutation lump sum has been paid), and

(b) sub-paragraph (1)(b) (maximum value on nominated date).

(3) Subject to paragraph (4), the top-up lump sum is to be treated as a trivial commutation lump sum.

(4) Paragraph (3) does not apply if—

(a) the top-up lump sum exceeds £10,000, and

(b) the aggregate of—

(i) the top-up lump sum, and

(ii) the value of the individual’s pension rights on the nominated date in relation to the original TCLS (as determined under paragraph 7(5) of Schedule 29 to FA 2004),

exceeds £30,000.

(5) Regulation 3 of RPS(AP)R 2009 (commutation payments) does not apply in relation to the top-up lump sum.

Commencement Information

I1 Reg. 25 in force at 6.4.2023, see reg. 1(2)