PART 2U.K.Application and computation of UK tax charges

[F1Reversal of fund depletionU.K.

4ZD.—(1) Where—

(a)a scheme makes a transfer, and

(b)the member’s funds have been previously reduced by a crystallisation event described in regulation 4ZA(3)(b),

then immediately before the transfer the amount calculated in accordance with paragraph (3) will be attributed back to the member’s funds in accordance with the order provided by regulation 4ZC(4).

(2) Where—

(a)the scheme receives a transfer,

(b)after receipt of that transfer the member’s funds have been reduced by a crystallisation event set out in regulation 4ZA(3)(b), and

(c)the transfer is one required by section 244B and 244C to be initially assumed to be excluded by that section but, after the member’s funds have been reduced by a crystallisation event set out in regulation 4ZA(3)(b), an event occurring before the end of the relevant period means that the transfer is not so excluded

then immediately before the event causing the transfer to be not excluded from the overseas transfer charge the amount to be calculated in accordance with paragraph (3) will be attributed back to the member’s funds in accordance with the order provided by regulation 4ZC(4).

(3) The amount to be attributed back to the member’s funds under paragraphs (1) and (2) is—

Where

A is the amount (being not less than nil) found under regulation 4ZB(5) less the aggregate amount of drawdown pension paid from that flexi-access drawdown fund,

B is the amount (being not less than nil) found under regulation 4ZB(7) less the aggregate amount of the scheme pension payments made to the member, and

C is the amount of any pension debit paid from that flexi-access drawdown fund, or sums and assets that have been applied towards the provision of scheme pension, on or after 6th April 2017.

(4) Where—

(a)the scheme is treated as making an unauthorised payment in accordance with paragraph 2A of Schedule 28, and

(b)the member’s funds have previously been reduced in accordance with regulation 4ZA(3)(b)(iii)

then immediately before the payment the amount calculated in accordance with paragraph (6) will be attributed back to the member’s funds in accordance with paragraph (7).

(5) Where—

(a)the member’s funds have been reduced in accordance with regulation 4ZA(3)(b)(iii), and

(b)no scheme pension has been paid in a period of 12 months for any reason, other than the death of the member or a recognised transfer

the amount calculated in accordance with paragraph (6) will be attributed back to the member’s funds in accordance with paragraph (7) on the first anniversary of the last payment of the scheme pension.

(6) The amount to be attributed back to the member’s funds under paragraphs (4) and (5)—

(a)is the amount found in regulation 4ZB(7) less the aggregate amount of the scheme pension payments made to the member and the amount of any pension debit paid from sums and assets that had been applied towards the provision of that scheme pension, but

(b)this amount cannot be below nil.

(7) The amount calculated in accordance with paragraph (6) will, subject to paragraph (9), be attributed back in the following order of priority—

(a)to the member’s RFTF, in priority of the RFTF with the latest key date to the earliest key date. The aggregate amount attributed back to the member’s RFTF will also be attributed back to the member’s RFTATF,

(b)to so much of the member’s UK tax-relieved funds made under the scheme on or after 6th April 2017,

(c)to the member’s RTF and TATF,

(d)to so much of the member’s UK tax-relieved funds made under the scheme before 6th April 2017.

(8) Where a person is temporarily non-resident and the total amount of withdrawals as set out in section 576A(2) of the Income Tax (Earnings and Pensions) Act 2003 in a temporary period of non-residence exceeds £100,000, for the purposes of section 576A, regulation 4ZA(3)(b) does not apply.

(9) The amount attributed back to a fund will not increase the value of the relevant fund found in accordance regulations 2, 3, 3A, 3B and 3C.]

Textual Amendments