Finance Act 2004

[F2 20C [F4 (1) This paragraph contains provision for determining the lump sum and death benefit allowance enhancement factor mentioned in paragraph 20B(2A) in the case of an arrangement that is a money purchase arrangement.] U.K.

(2) The lump sum and death benefit allowance enhancement factor is—

(a) if the arrangement is a cash balance arrangement, the cash balance arrangement non-residence factor (see sub-paragraphs (3) to (5)), and

(b) in any other case, the other money purchase arrangement non-residence factor (see sub-paragraphs (6) and (7)).

(3) The cash balance arrangement non-residence factor is—

(a) the factor arrived at by the application of sub-paragraph (4) in relation to the part of the active membership period during which the individual was a relevant overseas individual, or

(b) if there have been two or more parts of that period during which the individual was a relevant overseas individual, the aggregate of the factors arrived at by the application of sub-paragraph (4) in relation to each of those parts of that period.

(4) F5 The factor arrived at by the application of this subsection in relation to any part of the active membership period is—

where—

• A is the closing value of the individual’s rights under the arrangement;

• B is the opening value of the individual’s rights under the arrangement.

• [F6 SLA is the standard lifetime allowance for the tax year in which that part of that period ended.]

(5) For the purposes of sub-paragraph (4)—

(a) the closing value of the individual's rights under the arrangement is the amount which would, on the valuation assumptions (see section 277), be available for the provision of benefits to or in respect of the individual under the arrangement if the individual became entitled to the benefits at the end of that part of that period, and

(b) the opening value of the individual's rights under the arrangement is the amount which would, on the valuation assumptions, be available for the provision of benefits to or in respect of the individual under the arrangement if the individual became entitled to the benefits at the beginning of that part of that period.

(6) The other money purchase arrangement non-residence factor is—

(a) the factor arrived at by the application of sub-paragraph (7) in relation to the part of the active membership period during which the individual was a relevant overseas individual, or

(b) if there have been two or more parts of that period during which the individual was a relevant overseas individual, the aggregate of the factors arrived at by the application of sub-paragraph (7) in relation to each of those parts of that period.

(7) F7 The factor arrived at by the application of this sub-paragraph in relation to any part of the active membership period is—

where C is the amount of the contributions made under the arrangement by or in respect of the individual in any part of the active membership period during which the individual is a relevant overseas individual.

[F8 SLA is the standard lifetime allowance for the tax year in which that part of that period ended.]

[F9 (8) 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.]]

Textual Amendments

F2 Sch. 36 paras. 20A-20G and cross-headings inserted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 78, 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4; and by S.I. 2024/1012, regs. 1(2)(3), 17)

F4 Sch. 36 para. 20C(1) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 8(11)(b)

F5 Sch. 36 para. 20C(4): sum in formula “£1,000,000” substituted for “SLA” (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 3(4)(a)(i) (with reg. 6)

F6 Words in Sch. 36 para. 20C(4) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 3(4)(a)(ii) (with reg. 6)

F7 Sch. 36 para. 20C(7): sum in formula “£1,000,000” substituted for “SLA” (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 3(4)(b)(i) (with reg. 6)

F8 Words in Sch. 36 para. 20C(7) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 3(4)(b)(ii) (with reg. 6)

F9 Sch. 36 para. 20C(8) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 3(4)(c) (with reg. 6)

Modifications etc. (not altering text)

C4 Sch. 36 para. 20C modified (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2006/572, arts. 12, 13 (as amended by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(7))

C5 Sch. 36 Pt. 2 amendment to earlier transitional provisions 2024 c. 3, Sch. 9 paras. 125-132A (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 17