RPSM13102110 - Technical Pages: International: Application of charges to non-UK schemes: Member payment charges and taxable property unauthorised payment charge: Nature of member payment charges

Nature of member payment charges

The member payment charges are as follows:

• the unauthorised payments charge as set out in Section 208 (see RPSM04104500), but not a taxable property unauthorised payments charge imposed by virtue of section 174A (see RPSM04301100 and RPSM13102180)
• the unauthorised payments surcharge as set out in Section 209 (see RPSM04104600)
• the short service refund lump sum charge as set out in Section 205 - (see RPSM04101090)
• the special lump sum death benefits charge as set out in Section 206 - (see RPSM04101110), and
• charges under Sections 636B that relate to trivial commutation and winding-up lump sums and under 636C ITEPA 2003 that relate to trivial commutation and winding-up lump sum death benefits (see RPSM04101130 and RPSM04101140).

These charges apply to payments from a relevant non-UK scheme as if they were payments from a registered pension scheme. For example, a member of a relevant non-UK scheme (see RPSM13102130) could become liable to an unauthorised payments charge and an unauthorised payments surcharge if they received a lump sum of more than 25% of the total amount of their UK tax-relieved fund and of their relevant transfer fund (see RPSM13102150 to RPSM13102170) within that scheme.

An unauthorised payments charge could also apply if benefits were paid to a member of a relevant non-UK scheme before the normal minimum pension age. The payment of a pension before the age of 55 after 5 April 2010 could give rise to such a charge if it would be an unauthorised payment were it made from a registered pension scheme. To determine whether or not it was an unauthorised payment all of the provisions that apply to registered pension schemes would need to be taken into account, including the transitional provision in paragraph 21 of schedule 36 concerning a member's protected pension age (see RPSM03106010). So an unauthorised payments charge would not apply to a member of a relevant non-UK scheme who received benefits at the age of 50 if they had on 10 December 2003 a right under the scheme's rules to retire at that age.