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 before 6th April 2006 the individual has acquired rights under a pension scheme within paragraph 1 (1) by virtue of having become entitled to a pension credit.

The lifetime allowance enhancement factor is the pre-commencement pension credit factor.

The pre-commencement pension credit factor is—

$\frac{\mathrm{IAPC}}{\mathrm{SLA}}$

where—

IAPC is 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, as increased by the percentage specified in sub-paragraph (4), and

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

The percentage is the percentage by which the retail prices index for April 2006 is greater than that for the month in which the rights were acquired.

This paragraph does not apply in the case of an individual if paragraph 7 (primary protection) applies in relation to the individual.

This paragraph only applies if 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.