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SCHEDULES

SCHEDULE 36U.K.Pension schemes etc: transitional provisions and savings

Modifications etc. (not altering text)

C1Sch. 36 modified by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), art. 23D (as inserted (1.6.2009) by S.I. 2009/1172, arts. 1, 3; and amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 25(15))

Part 3U.K.Pre-commencement benefit rights

Modifications etc. (not altering text)

Lump sum rights exceeding £375,000: primary and enhanced protectionU.K.

[F127(1)If (and for so long as) paragraph 12 (enhanced protection) applies in relation to the individual, Schedule 29 to FA 2004 (authorised lump sums - supplementary) has effect in relation to the individual as if—U.K.

(a)in paragraph 1(1)(b) (pension commencement lump sum), the words “all or part of the member’s lump sum allowance is available, and” were omitted;

(b)for paragraph 2 (pension commencement lump sum: definition of “permitted maximum”) there were substituted—

“2(1)In paragraph 1 “the permitted maximum”, in relation to a lump sum, means the lower of—

(a)the applicable amount in relation to the relevant pension (see paragraphs 2A to 2D), and

(b)the amount specified in sub-paragraph (2).

(2)That amount is—

(a)the maximum amount of a pension commencement lump sum that could have been paid to the member on 5th April 2023 under the arrangement under which the entitlement to the lump sum arises, less

(b)the aggregate of each pension commencement lump sum (if any) to which the member has previously become entitled after that date under that arrangement,

or, if that produces a negative amount, nil.

(3)For the purposes of this paragraph, the maximum amount of a pension commencement lump sum that “could have been paid” on 5th April 2023 is to be determined on the assumption that any condition required to be met before such a payment could be made was met.

(4)Sub-paragraphs (5) and (6) apply where—

(a)it is necessary to determine for the purposes of this paragraph “the permitted maximum” in relation to a pension commencement lump sum paid after 5th April 2023 under an arrangement (“the paying arrangement”) under a registered pension scheme, and

(b)as a result of one or more recognised transfers made in the post-5th April 2023 period, any of the sums and assets applied for the provision of the lump sum were, at any time before the payment of the lump sum, held for the purposes of another arrangement (“a predecessor arrangement”) under a different registered pension scheme.

(5)The reference in sub-paragraph (2)(a) to the maximum amount of a pension commencement lump sum that could have been paid on 5th April 2023 under the paying arrangement, so far as the lump sum paid is referable to sums and assets that were held on that date for the purposes of a predecessor arrangement, is a reference to the maximum amount of a pension commencement lump sum that could have been paid on that date under that predecessor arrangement, had those sums and assets (and only those sums and assets) been applied for the provision of the lump sum.

(6)A reference in sub-paragraph (2)(b) to a pension commencement lump sum to which the member has become entitled under the paying arrangement before the date on which the lump sum is paid includes a reference to a pension commencement lump sum paid under a predecessor arrangement, so far as it is referable to sums and assets applied for the provision of the pension commencement lump sum paid under the paying arrangement.

(7)In this paragraph “the post-5th April 2023 period”, in relation to a lump sum, means the period beginning with 6 April 2023 and ending with the date on which the lump sum is paid.”.

(2)If (and for so long as) Schedule 29 applies in relation to the individual subject to the modifications in sub-paragraph (1), paragraph 12A of this Schedule has effect in relation to the individual as if sub-paragraph (2)(a) of that paragraph (which contains modifications of Schedule 29 inconsistent with those in sub-paragraph (1)) were omitted.]

Textual Amendments