(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)
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
If scheme members could sell their pensions for cash it would
breach the prescribed condition for approval that the scheme should
be “bona fide established for the sole purpose of providing
relevant benefits” (section 590(2)(a) ICTA 1988). Scheme
rules must therefore prohibit any assignment or surrender of
pensions whether they be pensions in payment or the future pensions
of members still in service. You may, nevertheless, sometimes be
faced with a situation where it is proposed that a scheme member
waives or disclaims his or her rights to benefits prospectively
payable. We take the view that such a waiver or disclaimer
constitutes a “surrender” for the purposes of section
590 (3)(d) ICTA 1988 and is therefore, generally, unacceptable. The
action you should take in such a case depends very much on the
particular facts and circumstances. You should consult SF70/302 and
refer the matter to your Section Manager if you have doubts over
how to proceed. Bear in mind that the ban on surrender etc relates
to pension including any lump sum obtained by commutation of
pension. It does not apply to a
separate lump sum (i.e. Not derived from
commutation of pension).
