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1(1)For the purposes of this Part a lump sum is a pension commencement lump sum if—
(a)the member becomes entitled to it in connection with the member becoming entitled to a relevant pension,
(b)it is paid when all or part of the member’s lifetime allowance is available,
(c)it is paid within the period of three months beginning with the day on which the member becomes entitled to it,
(d)it is paid when the member has reached normal minimum pension age (or the ill-health condition is satisfied),
(e)it is paid when the member has not reached the age of 75, and
(f)it is not an excluded lump sum (see sub-paragraph (4)).
(2)But if a lump sum falling within sub-paragraph (1) exceeds the permitted maximum, the excess is not a pension commencement lump sum.
(3)A pension is a relevant pension if—
(a)it is income withdrawal, a lifetime annuity or a scheme pension, and
(b)the member becomes entitled to it under the arrangement under which the member becomes entitled to the lump sum.
(4)A lump sum is an excluded lump sum if—
(a)the pension in connection with which the member becomes entitled to it is a scheme pension the rate of which is to reduce (or which is to cease to be payable) in accordance with paragraph 2(4)(c) of Schedule 28 when the member becomes entitled to state retirement pension, and
(b)the sole or main purpose of making provision for the pension to be such a pension was to increase the member’s entitlement to a lump sum on which there is no liability to income tax.
(5)Paragraph 2 defines the permitted maximum.
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