RPSM02105030 - Technical pages: Registering a pension scheme with HMRC: de-registration: De-registration threshold
De-registration threshold
| [Section 158(2) to (4)] |
The threshold is exceeded if the total of the percentages of the
fund used up by each scheme chargeable payment in any 12-month
period is 25% or more.
To work out the percentage of the fund used up by a scheme
chargeable payment, use the following formula
| Scheme chargeable payment | x | 100 | ||
| Value of scheme funds | 1 |
The value of the scheme funds is the market value of the assets held for the purposes of the scheme plus the amount of the sums held for the purposes of the scheme, both taken at the time of the payment.
Example
Two scheme chargeable payments have been made within a 12-month period. The payments were of £14,000 and £10,000. The fund value at the time of the first payment comprised assets with a market value of £80,000 and cash of £20,000 giving a total value of £100,000.
The percentage of the scheme fund used up at the time of the first scheme chargeable payment is -
| £ 14,000 | x | 100 | = 14% | ||
| £100,000 | 1 |
The fund was valued at £88,000 at the time of the second payment, which was of £10,000 -
| £10,000 | x | 100 | = 11% | ||
| £88,000 | 1 |
Add together 14% and 11% and the aggregate is 25%. The de-registration threshold is exceeded. This means there are grounds for HMRC to de-register the scheme.
| Glossary ( RPSM20000000) |
