RPSM04104660 - Technical Pages: Taxation: Unauthorised payments: Unauthorised payments surcharge: Valuing crystallised member rights

Valuing crystallised member rights when calculating the unauthorised payments percentage

The value of the member’s crystallised rights under an arrangement is the total of

• The value of each scheme pension or lifetime annuity to which the member has an actual entitlement (rather than a prospective entitlement) under the arrangement on the date of valuation, and
• The total amount of the sums and market value of assets representing the member’s unsecured pension fund or alternatively secured pension fund on the valuation date.

The scheme pension or lifetime annuity is valued using the formula

RVF x ARP

RVF = the relevant valuation factor in accordance with section 276. This will be 20 unless HMRC has agreed to the use of an alternative valuation factor greater than 20 (see RPSM11104230)

ARP = the annual rate of the scheme pension or lifetime annuity.