Pre-commencement pensionsU.K.
20(1)This paragraph makes provision about an individual [where—]U.K.
[(a)][on 5th April 2006, the individual] has an actual (rather than a prospective) right to the payment of one or more relevant existing pensions [, and]
[(b)during the period beginning on 5th April 2006 and ending on 5th April 2024, no benefit crystallisation event within the meaning of section 216 as that provision had effect at the end of that period has occurred in relation to the individual.]
[(1A) Section 637Q of ITEPA 2003 (availability of individual’s lump sum allowance) applies as if, immediately before the first relevant benefit crystallisation event occurring in relation to the individual on or after 6th April 2024—
(a)a relevant benefit crystallisation event within the meaning of that section had occurred in relation to the individual, and
(b)the [non-taxable amount in relation to the relevant crystallisation event] was an amount equal to 25% of the value of the individual’s pre-commencement pension rights immediately before the relevant benefit crystallisation event.]
(2)[Section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance)] applies as if, immediately before the first [relevant benefit crystallisation event] occurring in relation to the individual—
(a)a [relevant benefit crystallisation event within the meaning of that section] had occurred in relation to the individual, and
(b)the [[non-taxable amount in relation to the relevant crystallisation event] was 25% of] the value of the individual’s pre-commencement pension rights immediately before the [relevant benefit crystallisation event].
[(2A)Section 244IC (availability of member’s overseas transfer allowance) applies as if, immediately before the first transfer of the kind mentioned in section 244IA(1)(a) made in relation to the member on or after 6th April 2024—
(a)a transfer of that kind had been made in relation to the member, and
(b)the transferred value of the transfer was an amount equal to 25% of the value of the member’s pre-commencement pension rights immediately before the transfer.]
(3)The value of the individual’s pre-commencement pension rights at any time is—
where (subject to sub-paragraph (4)) ARP is an amount equal to—
(a) the annual rate at which the relevant existing pension is payable to the individual at that time, or
(b) if more than one relevant existing pension is payable to the individual at that time, the aggregate of the annual rates at which each of the relevant existing pensions is so payable.
[(4)In the case of drawdown pension, ARP is—
(a)[80% of] the maximum amount that may be paid in the drawdown pension year in which the time falls in accordance with pension rule 5 (see section 165), or
(b)in the case of an arrangement to which subsection (3A) of section 165 [applied at any time before 6 April 2015], [80% of] the maximum amount that could have been paid in accordance with that rule in the drawdown pension year in which that subsection first applied to the arrangement if it had not so applied.]
[(c)in the case of an arrangement to which section 165(3A) never applied but only if the time falls after the member's drawdown pension fund in respect of the arrangement is converted into the member's flexi-access drawdown fund in respect of the arrangement by the operation of any of paragraphs 8B to 8D of Schedule 28, 80% of the maximum amount that could have been paid in accordance with pension rule 5 in the drawdown pension year in which the conversion occurs had no conversion happened in that year by the operation of any of paragraphs 8B to 8D of Schedule 28.
, or]
(5)In this paragraph “relevant existing pension” has the same meaning as in paragraph 10(2); and paragraph 10(4) and (5) operates for the purposes of this paragraph for determining the annual rate at which a relevant existing pension is payable at any time (treating the references there to 5th April 2006 as to that time).
Textual Amendments
Modifications etc. (not altering text)