(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)
[PN17.27-30]
Section 599 ICTA 1988 imposes a tax charge on commutation of
the member’s entire pension under an approved or relevant
statutory scheme in special circumstances. These are:
a. commutation for triviality (see PSI8.3.2-11 for an employee member and/or PSI24.1.5 for an ex-spouse member), and
b. commutation because of serious ill health (see PSI8.3.15-22 for an employee member and/or PSI24.1.5 for an ex-spouse member).
[PN8.13]
Tax under section 599 is charged at the rate of 20% (from 6
April 1988) and is payable by the scheme administrator. Scheme
rules may allow the administrator to recover this liability out of
the commutation payment to the member.
