PART 4Modification of tax regime

Lifetime allowance charge14.

(1)

This regulation applies to a person (P) who—

(a)

is a member of the old scheme whether by virtue of pensionable service for that scheme or deemed transfer scheme service under paragraph 2 of Schedule 7 to the 2013 Act (final salary link);

(b)

is a member of the new scheme by virtue of pensionable service for the new scheme;

(c)

is being paid an ill-health pension at Lower Tier or Upper Tier under the new scheme; and

(d)

has an ill-health pension paid from the new scheme reduced as a consequence of P becoming entitled to payment of a scheme pension (within the meaning of paragraph 2 of Schedule 28 to the Finance Act 200418) under the old scheme.

(2)

Section 216 of the Finance Act 200419 (benefit crystallisation events and amounts crystallised) is modified in its application to P as specified in paragraph (3).

(3)

The payment of any scheme pension from the old scheme to P is treated as if it was not a benefit crystallisation event within the meaning of section 216 of the Finance Act 2004.

Annual allowance charge15.

(1)

This regulation applies to a person (P) who—

(a)

is a member of the old scheme whether by virtue of pensionable service for that scheme or deemed transfer scheme service under paragraph 2 of Schedule 7 to the 2013 Act (final salary link);

(b)

is a member of the new scheme by virtue of pensionable service for the new scheme; and

(c)

becomes entitled to payment of an ill-health pension at Lower Tier or Upper Tier under the new scheme.

(2)

Section 234 of the Finance Act 200420 (defined benefits arrangements) is modified in its application to P as specified in paragraph (3).

(3)

When calculating the closing value of P’s rights under the new scheme for the pension input period during which P becomes entitled to payment of the ill-health pension, the element of the ill-health pension at Lower Tier that represents pensionable service for the old scheme is not to be counted as being part of the closing value.