SCHEDULES
C4C3SCHEDULE 29Registered pension schemes: authorised lump sums—supplementary
Sch. 29 modified by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), art. 23C (as inserted (1.6.2009) by S.I. 2009/1172, arts. 1, 3 (as amended (with effect in accordance with s. 42(9) of the amending Act) by Finance Act 2014 (c. 26), s. 42(5); and as amended by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 72(1) (with Sch. 1 para. 72(2)(b)))
C1C2Part 1Lump sum rule
Sch. 29 Pt. 1 modified (6.4.2006) by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), arts. 1(1), 25(1)(2)(4)
Sch. 29 Pt. 1 applied (with modifications) (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 11
Pension commencement lump sum
C5C6F13A
1
Where this paragraph applies in relation to a pension commencement lump sum paid to the member, the pension scheme is to be treated as making to the member an unauthorised payment of the appropriate amount.
2
Subject to F3sub-paragraphs (3) to (4A), this paragraph applies in relation to a pension commencement lump sum if—
a
because of the lump sum, the amount of the contributions paid by or on behalf of, or in respect of, the member to the pension scheme, or to any other registered pension scheme, is significantly greater than it otherwise would be, and
b
the member envisaged at the relevant time that that would be so.
3
This paragraph does not apply in relation to any lump sum paid to the member on any day if the amount of the lump sum, when added to any other pension commencement lump sum paid to the member within the period of 12 months ending with that day, does not exceed F5£7,500.
4
This paragraph does not apply if the amount by which the contributions paid as mentioned in sub-paragraph (2)(a) is greater than it otherwise would be because of the lump sum does not exceed 30% of the amount of the lump sum.
F24A
This paragraph does not apply if—
a
the member has reached the age of 75 when the contributions are paid as mentioned in sub-paragraph (2)(a), and
b
the contributions are not paid by an employer of the member.
F45
The appropriate amount” is—
a
where the member becomes entitled to the lump sum before reaching the age of 75, so much of the amount crystallised by the benefit crystallisation event constituted by its payment (or the amount that would have been so crystallised but for paragraph 15A of Schedule 32) as does not exceed the amount of the member's lifetime allowance which is available on it;
b
where the member becomes entitled to the lump sum after reaching that age, the amount of the lump sum.
6
“The relevant time” is—
a
if paragraph (a) of sub-paragraph (2) is satisfied before the lump sum is paid, the time when that paragraph is first satisfied, and
b
otherwise, the time when the lump sum is paid.
Sch. 29 modified by The Pensions Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (S.I. 2006/207), regs. 1(1), 15 (as substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by S.I. 2012/1795, regs. 1(1), 6; and amended by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 96(3)-(14) (with Sch. 1 para. 96(16)(b))