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6.—(1) This regulation applies where—
(a)as a result of a rectification exercise, an amount by way of lump sum becomes payable to a member, or to a member’s personal representatives, under a relevant pension scheme,
(b)the lump sum is paid to the member’s personal representatives after the member’s death, and
(c)if the lump sum had been paid during the life of the member, it would have been a pension commencement lump sum(1).
(2) The payment is to be treated as a pension commencement lump sum to which the member had become entitled for the purposes of—
(a)Part 4 of FA 2004, and
(b)Part 9 of ITEPA 2003.
(3) For the purposes of section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance)(2), a relevant benefit crystallisation event in respect of a payment that falls within this regulation is to be treated as having occurred before any relevant benefit crystallisation event that occurs, in relation to the member, in respect of a defined benefits lump sum death benefit.
“Pension commencement lump sum” is defined in paragraph 1 of Schedule 29 to the Finance Act 2004. By virtue of section 637 of the Income Tax (Earnings and Pensions) Act 2003, expressions used in Chapter 15A of Part 9 of that Act and Part 4 of the Finance Act 2004 have the same meaning as they do in Part 4 of the Finance Act 2004.
Section 637S was inserted by paragraph 41 of Schedule 9 to FA 2024 and amended by S.I. 2024/1012.
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