RPSM03102040 - Technical Pages: Protecting pensions rights from tax charges: Primary protection: Reduction on divorce
Reduction of the primary protection factor on divorce
[Para 11 Sch 36] [Regs 17 & 18 The Registered Pension Schemes (EnhancedLifetime Allowance) Regulations 2006 – SI 2006/131]Primary protection cannot be given up. There is only one
situation where an individual may have their primary protection
reduced or lose it. This is if after 5 April 2006 the individual
becomes subject to a
pension debit as a result of a
pension sharing order following their divorce.
When an individual with primary protection becomes subject
to a pension debit their primary protection factor will be reduced.
This is done by reducing the amount ‘RR’ (the value of
the pension rights on 5 April 2006) in the formula (RR –
SLA)/SLA by the amount of the pension debit.
Where the pension debit result in ‘RR’ being
less than £1.5 million the individual will have lost primary
protection.
RPSM03103000 gives more information
on the operation of pension debits.
When an individual has become subject to a pension debit
they must notify HMRC. If primary protection has not been lost due
to the pension debit HMRC will issue a new certificate.
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| Glossary ( RPSM20000000) |
