PART 2Modifications of Part 4 of the Finance Act 2004

CHAPTER 3Benefits

Pension commencement lump sum: additional lump sum paid for deceased member24.

(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.