(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)
The 2.25 multiple for calculating the maximum 'uplifted' lump
sum introduced by paragraph 23, Schedule 6, Finance Act 1989
applies to employees who, in the case of schemes which came into
existence before 14 March 1989, became members on or after 1 June
1989 (and do not have continued rights) or, in the case of schemes
established on or after 14 March 1989, became members at any time
(and again, do not have continued rights). Schedule 6 imposes a
statutory override on schemes approved before 27 July 1989 subject
to transitional regulations (The Retirement Benefits Schemes
(Continuation of Rights of Members of Approved Schemes) Regulations
1990) as described at
PSI2.3.23. For schemes
approved on or after 27 July 1989 the maximum lump sum limit must
be reflected in the scheme rules under revised discretionary
practice as a condition of approval under section 591 ICTA 1988
(see
PSI2.3.13). The same
transitional protection is available under discretionary practice
by analogy with the Regulations above.
