RPSM03305080 - Scheme Administrator Pages: Protecting pension rights from tax charges: Benefit payments - primary protection: Paying any LTA tax due

Accounting for and paying any lifetime allowance charge

[s254][Regs 3 & 6 The Registered Pension Schemes (Accounting and Assessment Regulations 2005 – SI 2005/3454]

Although an individual may have primary protection they may still be liable to the lifetime allowance charge because the benefits crystallising are more than their protected lifetime allowance. The scheme administrator is jointly and severally liable with the scheme member for the lifetime allowance charge

The scheme administrator must account for and pay any lifetime allowance charge due on a quarterly basis. This is done via the Accounting for Tax return (AFT). These quarterly returns cover the three month periods ending on 31 March, 30 June, 30 September and 31 December. The AFT must be submitted to HMRC within 45 days following the end of the quarter in which the lifetime allowance charge arises.

Payment of the tax due should be made at the same time the AFT is submitted. There is no requirement for HMRC to raise an assessment for the tax; it automatically becomes due and payable at the same time that the AFT return has to be submitted.

The scheme administrator must report to HMRC the following pieces of information in respect of a liability to the lifetime allowance charge on the AFT return.

• The number of individuals liable to a lifetime allowance charge
• The name, address, date of birth, and National Insurance number of each individual liable to a lifetime allowance charge
• The date of the benefit crystallisation event producing the lifetime allowance charge
• The amount of the chargeable amount that represents

Where the scheme administrator becomes aware that information previously reported on the AFT was incorrect or insufficient they should immediately make an amended AFT return.