SCHEDULE 36Pension schemes etc: transitional provisions and savings
Part 2Pre-commencement rights: enhancement of allowances etc
F1Pension credits from previously crystallised rights
20A
(1)
This paragraph applies F2... in relation to an individual where—
(a)
the individual has (at any time after 5th April 2006 but before 6th April 2024) acquired rights under a registered pension scheme by reason of having become entitled to a pension credit,
(b)
the pension credit derived from the same or another registered pension scheme,
(c)
the rights under the registered pension scheme which became subject to the corresponding pension debit consisted of, or included, rights to a post-commencement pension in payment, and
(d)
notice of intention to rely on this paragraph is given to His Majesty’s Revenue and Customs in accordance with regulations made by the Commissioners for His Majesty’s Revenue and Customs.
(2)
“Post-commencement pension in payment” means a pension to which a person became entitled on or after 6th April 2006.
F3(3)
Chapter 15A of Part 9 of ITEPA 2003 (pension income: lump sums under registered pension schemes) has effect in relation to the individual as if the amount specified in section 637R of that Act (individual’s lump sum and death benefit allowance) were the individual’s enhanced lump sum and death benefit allowance (as determined under paragraph 20H of this Schedule).
(3A)
For the purposes of paragraph 20H, a lump sum and death benefit allowance enhancement factor, determined in accordance with sub-paragraphs (4) to (6) of this paragraph, operates in relation to the individual.
(4)
The lump sum and death benefit allowance enhancement factor is the pension credit factor.
F4(5)
The pension credit factor is—
where—
A is the post-commencement pension in payment portion of the amount which is the appropriate amount for the purposes of section 29(1) of WRPA 1999 or Article 26(1) of WRP(NI)O 1999 in relation to the pension credit;
SLA is the standard lifetime allowance for the tax year in which the rights mentioned in sub-paragraph (1)(a) were acquired.
(6)
The post-commencement pension in payment portion of the appropriate amount referred to in the definition of A—
(a)
in a case where the appropriate amount is arrived at under section 29(2) or (3)(b) of WRPA 1999 or Article 26(2) or (3)(b) of WRP(NI)O 1999, is so much of that amount as is attributable to rights to a post-commencement pension in payment;
(b)
in a case where the appropriate amount is arrived at under section 29(3)(a) of WRPA 1999 or Article 26(3)(a) of WRP(NI)O 1999, is so much of that amount as is just and reasonable.
(7)
In this paragraph and in paragraphs 20B to 20G, “relevant benefit crystallisation event” has the same meaning as in section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance).
(8)
Where this paragraph applies, for the purposes of this Part a lump sum is not an uncrystallised funds pension lump sum (see paragraph 4A of Schedule 29) ifF5... the amount given by the formula in sub-paragraph (9) is less than 25% of the lump sum.
(9)
The formula is—
where—
A is—
- (a)
in the case of an individual in relation to whom a relevant protection provision applies, the individual’s protected lump sum and death benefit allowance (see paragraph 6A(4));
- (b)
in any other case, £1,073,100;
B is the amount that would be the previously-used amount within the meaning of section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance) if a relevant benefit crystallisation event within the meaning of that section had occurred immediately before the lump sum is paid.
F6(10)
A reference in this paragraph to the standard lifetime allowance for a tax year is to the standard lifetime allowance as determined under section 218, as it had effect for that tax year.