For paragraph 7 (primary protection) substitute—

“7

(1)

This paragraph applies in the case of an individual where—

(a)

the amount of the relevant pre-commencement pension rights of the individual exceeds £1,500,000, and

(b)

notice of intention to rely on this paragraph is given to His Majesty’s Revenue and Customs in accordance with regulations made by the Commissioners for His Majesty’s Revenue and Customs.

(2)

Chapter 15A of Part 9 of ITEPA 2003 (pension income: lump sums under registered pension schemes) has effect—

(a)

in relation to a relevant benefit crystallisation event within the meaning of section 637Q of ITEPA 2003 (availability of individual’s lump sum allowance) occurring in relation to the individual, as if the amount specified in section 637P of ITEPA 2003 (individual’s lump sum allowance) were £375,000;

(b)

in relation to a relevant benefit crystallisation event within the meaning of section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance) occurring in relation to the individual, as if the amount specified in section 637R of ITEPA 2003 (individual’s lump sum and death benefit allowance) were £1,800,000.

(3)

A lump sum and death benefit allowance enhancement factor operates in relation to the relevant benefit crystallisation event mentioned in paragraph 6A(1).

(4)

The lump sum and death benefit allowance enhancement factor is the primary protection factor.

(5)

The primary protection factor is—

$\frac{RR-\pounds 1,500,000}{\pounds 1,500,000}$

where RR is the amount of the relevant pre-commencement pension rights of the individual (see sub-paragraph (6)).

(6)

The amount of the relevant pre-commencement 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).

(7)

Sub-paragraph (5) is subject to paragraph 11 (pension debit on or after 6th April 2006) and paragraph 11A (pension debit on or after 6th April 2006: lump sum death benefits).

(8)

Where this paragraph applies in the case of an individual, for the purposes of this Part a lump sum is not an uncrystallised funds pension lump sum (see paragraph 4A of Schedule 29) if—

(a)

the lump sum condition (see paragraphs 24(2) and (3), 25 and 26 of this Schedule) is met in relation to the individual, or

(b)

immediately before the lump sum is paid, the amount given by the formula in sub-paragraph (9) is less than 25% of the lump sum.

(9)

The formula is—

$\frac{\pounds 1,800,000-A}{4}$

where A is the amount that would be the previously-used amount within the meaning of section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance) if a relevant benefit crystallisation event within the meaning of that section had occurred immediately before the lump sum is paid.”