RPSM03104521 - Technical Pages: Protecting pension rights from tax charges: Enhanced protection: Relevant benefit accrual: Crystallisation values

The crystallisation value of benefits and transfers for the relevant benefit accrual test for defined benefits or cash balance arrangements

In the relevant benefit accrual test for defined benefits or cash balance arrangements the amount of the payments that are compared to the appropriate limit is called the ‘relevant crystallised amount’. The relevant crystallised amount is the total of the crystallised amounts for each ‘relevant event’ – that is benefit crystallisation events and permitted transfers to other money purchase arrangements. (See RPSM03104520 for more information.)

For a benefit crystallisation event ( BCE) the amount crystallised is the amount of the BCE. RPSM11104000 gives more information on BCEs and the amount crystallised.

For a permitted transfer to an other money purchase arrangement that is not a BCE the amount crystallised is the total of the

• amount of sums, and
• market value of assets

held for the purposes of the arrangement that are transferred.

A transfer to an other money purchase arrangement that is part of a qualifying recognised overseas pension scheme is a BCE (8).

Transfer of crystallised rights

[Article 36 The Taxation of Pension Schemes (Transitional Provisions) Order 2006 – SI 2006/572]

Where

• a member is in receipt of a scheme pension, and
• sums and assets representing the pension in payment is transferred in connection with the winding of the scheme providing the pension

the relevant crystallised amount in respect of the transferred crystallised scheme pension will be nil.

Relevant events occurring at different times

Where ‘relevant events’ that form part of the total ‘relevant crystallised amount’ occur at different times the value of the earlier event is not changed. There is no uprating in line with the increase in the standard lifetime allowance to take account of the earlier payment.