RPSM05302010 - Scheme Administrator Pages: Contributions and tax relief: Member contributions - refunds of contributions: Permitted refunds of contributions

Permitted refunds of contributions covered by legislation

Scheme administrators of registered pension schemes will be able to choose how to deal with contributions received from members which turn out to be in excess of the limits for tax relief under section 190 Finance Act 2004 (see RPSM05101120).

Scheme rules may be written which make no provision for refunds of excess amounts to be repaid except where it is required by DWP legislation. Alternatively, scheme provisions may allow refunds, and if they do, such payments will be authorised payments if they satisfy the requirements to be a:

• short service refund lump sum under paragraph 5 of Schedule 29 Finance Act 2004,
• refund of excess contributions lump sum under section 166(d) and paragraph 6 of Schedule 29 Finance Act 2004, or
• a contributions refund lump sum as set out from RPSM15108000.

In these cases, refunds may be made automatically by the scheme administrator without prior approval being obtained from HMRC.

There may be other instances where refunds of contributions are appropriate (see RPSM05302020 for further details).