RPSM11103140 - Technical Pages: Lifetime allowance: The process for testing: In member's lifetime: At or before BCE: Issues for the scheme administrator

Issues the scheme administrator will need to consider in order to establish whether or not a chargeable amount arises at a BCE

The first thing a scheme administrator needs to consider is how much will crystallise for lifetime allowance purposes under the member’s arrangements in their own particular scheme at the particular BCE (or BCEs). RPSM11104000 onwards explains how the crystallised value is worked out for each of the eleven different BCEs (BCEs 1-9 and 5A and 5B).The issues that may be relevant in establishing if the amount crystallising under their scheme will generate a chargeable amount are as follows.

• How much of the member’s lifetime allowance has crystallised previously under that scheme in relation to that member? (The scheme administrator will already know this.)
• How much has crystallised previously under other registered pension schemes in relation to that member? If there have been any BCEs under another scheme the member will have a statement from that other scheme’s administrator confirming the amount of lifetime allowance they have used up under that scheme (see RPSM11103320).
• Is the member entitled to an enhanced lifetime allowance (including primary protection), enhanced protection or fixed protection? If they are they will have been provided with a certificate by HMRC confirming this entitlement. If the member intends to rely on this entitlement at that BCE they are required to report this to the scheme administrator before the BCE occurs (see RPSM11103160).
• Is the member in receipt of pre-commencement pension (a pension in payment on 5 April 2006)? If they are
• if this is the first BCE occurring in relation to that member under any scheme, the member’s available lifetime allowance at that BCE will be reduced to reflect the level of pre-commencement pension in payment at that time (see RPSM11104900 onwards),
• if this is not the first BCE occurring in relation to that individual under any scheme, account will still need to be taken of the reduction to their available lifetime allowance that occurred at that first BCE due to any of pre-commencement pension in payment at that time (this will not necessarily be reflected in the statement provided by the scheme where that first BCE occurred - see RPSM11103400), and
• Are other BCEs going to occur under other schemes in relation to that member between the time they contact the individual and the time the BCE will actually occur under their scheme, or are any other BCEs going to occur simultaneously with the BCE under their scheme? Also have there been recent BCEs where the scheme administrator has not yet sent the member a statement?
• Where the member is aged over 75 and wishes to take a pension commencement lump sum in relation to a connected pension (see RPSM09104100 onwards). The worked examples on RPSM11103510 to RPSM11103530 give an idea of how the process might work in practice.