|[Paras 21 & 22 Sch 36]|
From 6 April 2010, benefit payments to a member under the normal minimum pension age of 55 incur tax charges, unless
Some members of
retirement benefits schemes and deferred annuity
contracts (section 32 policies) had a right at 5 April 2006 to take
pension benefits at their request from an age from 50 onwards.
These rights can be protected so that payments below age 55 on or
after 6 April 2010 do not incur tax charges.
The age at which the member has the right to take their pension on 5 April 2006 becomes their protected pension age from 6 April 2010. The tax charge does not affect them before 6 April 2010, as the normal minimum pension age is 50 until that date.
For these rights to be protected
For example, on 10 December 2003 a scheme may give its members
an unqualified right (that is, without the employer or trustees'
agreement being necessary) to take pension benefits before 55, but
only if they are made redundant. If any members are made redundant
after 5 April 2010, are aged over 50 but under 55 and exercise
their right to take pension benefits, they will have a protected
pension age and will not be liable to a tax charge.
RPSM03106025 gives more information on what is meant by an unqualified right to take benefits.
See RPSM03106060 to RPSM03106072 for other conditions that apply to taking benefits before normal minimum pension age.
|Glossary ( RPSM20000000)|