SCHEDULES

SCHEDULE 36Pension schemes etc: transitional provisions and savings

Part 2Pre-commencement rights: lifetime allowance charge

“Primary protection”

7

1

This paragraph makes provision for the operation of a lifetime allowance enhancement factor in relation to all benefit crystallisation events occurring in relation to an individual where—

a

the amount of the relevant pre-commencement pension rights of the individual exceeds £1,500,000 (the standard lifetime allowance for the tax year 2006-07), and

b

notice of intention to rely on this paragraph is given to the Inland Revenue in accordance with regulations made by the Board of Inland Revenue.

2

The lifetime allowance enhancement factor is the primary protection factor.

3

The primary protection factor is—

RR-SLASLAmath

where—

RR is the amount of the relevant pre-commencement pension rights of the individual, and

SLA is £1,500,000 (the standard lifetime allowance for the tax year 2006-07).

4

Sub-paragraph (3) is subject to paragraph 11 (pension debit on or after 6th April 2006).

5

The amount of the relevant pre-commencement pension rights of the individual is the aggregate of—

a

the value of the individual’s relevant uncrystallised pension rights on 5th April 2006 (calculated in accordance with paragraphs 8 and 9), and

b

the value of the individual’s relevant crystallised pension rights on that date (calculated in accordance with paragraph 10).