PSI13.3.32 - Withdrawal from Service: Maximum Deferred Benefits – Pension Sharing on Divorce

(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 an employee’s benefit entitlement in the scheme is

• permanently reduced by a pension sharing on divorce order (see PSI3.5.4), and
• the pension debit must be taken into account for Revenue limits purposes (see PSI6.5.89)

the maximum permissible total pension benefit for the employee must not exceed

• the amount of pension benefit that could have been paid to the employee had there been no pension sharing on divorce order where the limit in PSI13.3.5 applies for defined benefit scheme or the limit in PSI13.3.11 applies for a money purchase scheme

less

• the pension equivalent of the pension debit (see PSI13.3.33).

Note that where the N/NS x P limit applies (see PSI13.3.7) the pension equivalent of the pension debit is deducted from P before N/NS is applied.