(This archived guidance relates to HMRC discretionary
practice before the 6th April 2006. For current guidance on
Registered Pension Schemes see the Registered Pension Schemes
Manual)
Where benefits are excessive (as above) any surplus funds
which are not attributable to the employee's AVCs cannot be
returned to the employee. In these circumstances the surplus is
retained in the scheme if it is constituted as a common trust fund
(but see
PSI4.3.8) or, if the scheme is funded by
individually earmarked policies, returned to the employer subject
to the usual exit tax of 35% (see
PSI17.3.1).
