Finance Act 2024

Availability of individual’s lump sum allowance U.K.

125 (1) This paragraph applies where—

(a) one or more benefit crystallisation events within the meaning of Part 4 of FA 2004 occurred in relation to an individual before 6 April 2024, F1 ...

(b) a relevant benefit crystallisation event within the meaning of section 637Q of ITEPA 2003 (availability of individual’s lump sum allowance) occurs in relation to the individual on or after that date[F2 , and

(c) at the time the relevant benefit crystallisation occurs, the individual—

(i) is not an individual to whom paragraph 12 of Schedule 36 to FA 2004 applies (enhanced protection), or

(ii) is such an individual and is not within paragraph 24(1) of Schedule 36 to FA 2004 (persons with lump sum protection).]

F3 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) [F4 The] amount of the individual’s lump sum allowance that is available on the occurrence of the relevant benefit crystallisation event is—

(a) the amount of that allowance that is available in accordance with section 637Q of ITEPA 2003 on the occurrence of that event, less

(b) an amount equal to 25% of the individual’s lifetime allowance previously-used amount;

or, if that produces a negative result, nil.

[F5 (3A) Where—

(a) the individual is an individual to whom paragraph 7 of Schedule 36 to FA 2004 applies (primary protection),

(b) the individual is not within paragraph 24(1) of Schedule 36 to FA 2004 (persons with lump sum protection), and

(c) 25% of the individual’s lifetime allowance previously-used amount is greater than £375,000,

sub-paragraph (3) has effect as if the amount determined under paragraph (b) of that sub-paragraph were £375,000.]

(4) But [F6 sub-paragraph (3) does] not apply if, on the occurrence of the relevant benefit crystallisation event, a transitional tax-free amount certificate is in force in relation to the individual.

(5) In such a case, the amount of the individual’s lump sum allowance that is available on the occurrence of the relevant benefit crystallisation event is—

(a) the amount of that allowance that is available in accordance with section 637Q of ITEPA 2003 on the occurrence of that event, less

(b) the individual’s lump sum transitional tax-free amount;

or, if that produces a negative result, nil.

(6) For provision about the meaning of expressions used in this paragraph, see paragraph 129.

Textual Amendments

F1 Word in Sch. 9 para. 125(1)(a) omitted (with effect in accordance with reg. 1(3) of the amending S.I.) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(3)(a)

F2 Sch. 9 para. 125(1)(c) and word inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(3)(b)

F3 Sch. 9 para. 125(2) omitted (with effect in accordance with reg. 1(3) of the amending S.I.) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(4)

F4 Word in Sch. 9 para. 125(3) substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(5)

F5 Sch. 9 para. 125(3A) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(6)

F6 Words in Sch. 9 para. 125(4) substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 4(7)