C4C3C19C20C5Part 9Pension income
Pt. 9 excluded by 2004 c. 12, Sch. 36 para. 45A(1) (as inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 4 para. 19)
Pt. 9 modified (6.4.2023) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023 (S.I. 2023/113), regs. 1(2), 23(2), 24(2), 26(2), 28(2) (with reg. 1(3))
Pt. 9 modified (14.9.2023) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) (No. 2) Regulations 2023 (S.I. 2023/912), regs. 1(2), 9(2), 11(2), 16(2) (with reg. 1(3))
Pt. 9 modified (31.10.2023) by The Registered Pension Schemes (Authorised Member Payments) Regulations 2023 (S.I. 2023/1012), regs. 1, 4
C19C7C11C6C17C13C9C8C12C18C14C16C10C15C2C1F1CHAPTER 15ALump sums under registered pension schemes
Pt. 9 Ch. 15A substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 41, 124 (with Sch. 9 paras. 125-132)
Pt. 9 Ch. 15A modified (with effect in accordance with reg. 1(3) of the amending S.I.) by S.I. 2006/569, reg. 5(1) (as substituted by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 10(2)(a))
Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2014 c. 26, Sch. 6 para. 1(2) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 92(3), 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2016 c. 24, Sch. 4 para. 1(2) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 93(3)(a), 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 6A (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 67, 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A applied (with modifications) (6.4.2024 for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 19(1A)(1B) (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 76(3), 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2016 c. 24, Sch. 4 para. 9(2) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 93(4)(b), 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2013 c. 29, Sch. 22 para. 1(2) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 91(3), 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 7 (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 68, 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2011 c. 11, Sch. 18 para. 14(3) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 90(4), 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A excluded (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 34 para. 5ZA (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 60(3), 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by S.I. 2006/572, arts. 25CA-25CC (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 95(5), 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 18 (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 75, 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 29A (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 85, 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by S.I. 2006/207, reg. 18 (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 62(8), 124 (with Sch. 9 paras. 125-132))
Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 12(3A)-(3H) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 71(2), 124 (with Sch. 9 paras. 125-132))
Allowances
637PIndividual’s lump sum allowance
An individual’s “lump sum allowance” is £268,275.
637QC22Availability of individual’s lump sum allowance
1
This section is about the availability of an individual’s lump sum allowance on the occurrence of a relevant benefit crystallisation event (“the current event”).
2
In this section—
a
“relevant benefit crystallisation event”, in relation to an individual, means the individual becoming entitled to a relevant lump sum;
b
“relevant lump sum” means—
i
a pension commencement lump sum, or
ii
an uncrystallised funds pension lump sum.
3
If no relevant benefit crystallisation event has occurred in relation to the individual before the current event, the whole of the individual’s lump sum allowance is available.
4
Otherwise, the amount of the individual’s lump sum allowance that is available is—
a
so much of that allowance as is left after deducting the previously-used amount, or
b
if none is left after deducting that amount, nil.
5
For this purpose “the previously-used amount” is the aggregate of the non-taxable amounts in relation to each relevant benefit crystallisation event that has occurred in relation to the individual before the current event.
6
In subsection (5) “non-taxable amount”, in relation to a relevant benefit crystallisation event, means so much (if any) of the relevant lump sum to which the event relates as is exempt from the charge to income tax by virtue of any provision of this Chapter.
7
A reference in this section to a relevant benefit crystallisation event is to a relevant benefit crystallisation event occurring on or after 6 April 2024.
8
For transitional provision under which the amount of an individual’s lump sum allowance available on the occurrence of a relevant benefit crystallisation event may be reduced as a result of events occurring before 6 April 2024, see paragraph 125 of Schedule 9 to FA 2024.
637RC21Individual’s lump sum and death benefit allowance
An individual’s “lump sum and death benefit allowance” is £1,073,100.
637SC23Availability of individual’s lump sum and death benefit allowance
1
This section is about the availability of an individual’s lump sum and death benefit allowance on the occurrence of a relevant benefit crystallisation event (“the current event”).
2
In this section—
a
“relevant benefit crystallisation event”, in relation to an individual, means—
i
the individual becoming entitled to a relevant lump sum, or
ii
a person being paid a relevant lump sum death benefit in respect of the individual;
b
“relevant lump sum” means—
i
a pension commencement lump sum,
ii
a serious ill-health lump sum, or
iii
an uncrystallised funds pension lump sum;
c
“relevant lump sum death benefit” means any authorised lump sum death benefit other than—
i
a charity lump sum death benefit, or
ii
a trivial commutation lump sum death benefit.
3
If no relevant benefit crystallisation event has occurred in relation to the individual before the current event, the whole of the individual’s lump sum and death benefit allowance is available.
4
Otherwise, the amount of the individual’s lump sum and death benefit allowance that is available is—
a
so much of that allowance as is left after deducting the previously-used amount, or
b
if none is left after deducting that amount, nil.
5
For this purpose “the previously-used amount” is the aggregate of the non-taxable amounts in relation to each relevant benefit crystallisation event that has occurred in relation to the individual before the current event.
6
In subsection (5) “non-taxable amount”, in relation to a relevant benefit crystallisation event, means so much (if any) of the relevant lump sum, or relevant lump sum death benefit, to which the event relates as is exempt from the charge to income tax by virtue of any provision of this Chapter.
7
Where more than one relevant benefit crystallisation event within subsection (2)(a)(i) occurs in relation to an individual on the same day, it is for the individual to decide the order in which they are to be treated as occurring for the purposes of this section.
8
Where more than one relevant benefit crystallisation event within subsection (2)(a)(ii) occurs in relation to an individual, they are to be treated for the purposes of this section as occurring—
a
immediately before the individual’s death,
b
immediately after any pension commencement lump sum to which the individual becomes entitled immediately before death by virtue of section 166(2) of FA 2004 (lump sum rule), and
c
in such order as may be decided by the individual’s personal representatives.
9
A reference in this section to a relevant benefit crystallisation event is to a relevant benefit crystallisation event occurring on or after 6 April 2024.
10
For transitional provision under which the amount of an individual’s lump sum and death benefit allowance available on the occurrence of a relevant benefit crystallisation event may be reduced as a result of events occurring before 6 April 2024, see paragraph 126 of Schedule 9 to FA 2024.
11
For further transitional provision that may affect the operation of this section, see paragraph 20 of Schedule 36 to FA 2004 (pensions in payment before commencement of Part 4 of FA 2004).
Pt. 9: power to amend conferred (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), s. 4(3)