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11.—(1) The restrictions imposed by this regulation are those specified in paragraphs (2) and (3).
(2) The restriction specified in this paragraph is that no amount may be paid to a controlling director by way of a lump sum on his pension date (as defined in section 630(1)) out of the conversion payment unless, within six months beginning with the date of change, the administrator of the retirement benefits scheme which is the subject of the application under Schedule 23ZA has given such a lump sum certificate as would be required under the rules of the retirement benefits scheme if it were making a transfer payment to a personal pension scheme.
(3) The restriction specified in this paragraph is that the amount that may be paid by way of lump sum as mentioned in paragraph (2) shall not exceed the sum found by the formula in paragraph (4).
(4) The formula referred to in paragraph (3) is—
B × EF
Here—
B is the amount shown in the certificate mentioned in paragraph (2); and
EF is the greater of 1 and the fraction in paragraph (5).
(5) The fraction referred to in paragraph (4) is—
Here—
R1 is the value of the retail prices index for the last month for which that index had been published at the date when the lump sum referred to in paragraph (2) was calculated; and
R2 is the value of that index for the last month for which that index had been published at the time of the approval by the Board of the application under Schedule 23ZA.
(6) The references in paragraph (5) to the retail prices index shall be construed in accordance with section 833(2)(1) as if that paragraph were contained in the Income Tax Acts.
Section 833(2) was amended by Schedule 2 to the Transfer of Functions (Registration and Statistics) Order 1996 (S.I. 1996/273).
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