(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)
Generally, an employee can have a lump sum commutation
payment only once (see
PSI8.1.6-8). Increases after a
retirement benefit has been taken are limited to the provision of
further pension none of which can be commuted. However, increases
awarded may be backdated to commencement of pension with the
"arrears" payable in lump sum form. Such a lump sum is a pension
payment and as such is taxable in the normal way (see
PSI17.2.1).
