PART 2Modifications of Part 4 of the Finance Act 2004

CHAPTER 3Benefits

Pension commencement lump sum: additional lump sum paid for deceased memberI124

1

Paragraphs (2) to (5) apply where—

a

as a result of a relevant rectification provision, an amount by way of lump sum (“the additional lump sum”) has become payable to a member (“P”), or to P’s personal representatives, under a pension scheme,

b

the additional lump sum would have been a pension commencement lump sum if it had been paid to P within the period specified in paragraph 1(1)(c) of Schedule 29 to FA 2004 (time period within which pension commencement lump sum must be paid),

c

P dies without having been paid the additional lump sum, and

d

the additional lump sum is paid to P’s personal representatives.

2

The payment—

a

is to be treated as falling within section 164(1) of FA 2004 (authorised member payments);

b

is to be treated as a pension commencement lump sum paid under a registered pension scheme for the purposes of Part 9 of ITEPA 200334.

3

The making of the payment is to be treated as a benefit crystallisation event35 in relation to P for the purposes of the lifetime allowance charge36.

4

The amount crystallised for the purposes of that benefit crystallisation event is the amount of the payment.

5

Regulation 5 of RPS(AP)R 2009 (lump sum errors) does not apply in relation to the payment.