RPSM09104542 - Technical Pages: Member
benefits: Lump sums: Pension commencement lump sum: Maximum amount:
Available portion: Pre 6 April 2006 lump sum included
When a lump sum paid before 6 April 2006 is included in the
calculation of the member’s available portion
[The Taxation of Pension Schemes (Transitional Provisions)
Order 2006 (SI 2006 No 572) Art. 28]
A member who received a tax free lump sum before 6 April 2006
will have it included in the value of ‘AAC’ in the
member’s ‘available portion’ (and so the
calculation of the maximum
pension commencement lump sum) in the following
circumstances.
- The payment is made from a
registered pension scheme that was
- Approved for the purposes of Chapter 1
Part 14 ICTA 1988, or
- A relevant statutory scheme as defined in
s611A ICTA 1988 (or treated by HMRC as if it were a relevant
statutory scheme), or
- An annuity contract, that does not provide
for the immediate payment of benefits, used to secure benefits
provided by such schemes, or
- A Parliamentary scheme or fund as
mentioned in s613(4)(b) to (d) ICTA 1988.
- The member has chosen to defer the entitlement to the related
pension until after 5 April 2006 and the election to defer
entitlement to the pension was made on or after 27 July 2004.
- The amount that is included in the value of ‘AAC’
is the amount of the lump sum to which the member became entitled
before 6 April 2006.
The pre 6 April 2006 lump sum will be treated as if the member
became entitled to it on 6 April 2006 and the amount treated as
having been crystallised is the amount to which the member became
entitled,
For the avoidance of doubt no
lifetime allowance charge is due on the amount of
the lump sum treated as crystallising on 6 April 2006.
