RPSM03101030 - Technical Pages: Protecting pension rights from tax charges: Valuing pension rights at 5 April 2006: Crystallised rights - relevant existing pension

Crystallised rights: what is a relevant existing pension?

The term ’relevant existing pension’ is defined in paragraph 10(2) of Schedule 36 Finance Act 2004, but essentially it is any of the following

1. a pension under an approved Chapter I Part 14 Income and Corporation Taxes Act 1988 (ICTA) retirement benefits scheme
   
2. a pension from a scheme formerly approved under Section 208 ICTA 1970
   
3. a pension under a relevant statutory scheme (defined in section 611A ICTA 1988) or a scheme treated by HMRC as if it were a relevant statutory scheme
   
4. an annuity (or drawdown pension) under any contract relating to (a) to (c) inclusive (such annuities/pensions include bought-out benefits where the contract is in the member’s name)
   
5. a pension under the Parliamentary pension schemes or funds
   
6. an annuity from a retirement annuity contract
   
7. an annuity from personal pension scheme funds approved under Chapter 4 Part 14 ICTA 1988
   
8. income withdrawals under a personal pension scheme.

However, the term relevant existing pension does not include an entitlement to a pension from any of the above where the right arises on the death of another individual. Thus an individual should not value any pension in payment where payment is made to them as a dependant of a deceased member of a tax approved scheme.