RPSM09104650 - Technical Pages: Member benefits: Lump sums: Serious ill health lump sum: Reports to HMRC

Reporting payment of a serious ill-health lump sum to HMRC

[s251(1)(a) and (4)(a)][Reg 3, ‘reportable Events’ 4 and 6, The Registered Pension Schemes (Provision of Information) Regulations 2006 (SI 2006/567]

There are two circumstances where the scheme administrator must report the payment of a serious ill-health lump sum to HMRC.

The first circumstance is where the recipient of the payment is

• a director of the sponsoring employer of the scheme in the year of payment (or has been in the previous six years) or
• connected to such a director in the same period, or
• alone or with others, represented the sponsoring employer in that time, or
• connected to that employer.

The value of the serious ill-health lump sum paid is not a factor here. This requirement is explained in more detail in RPSM12301060

The second circumstance is where the member is relying on either an enhanced lifetime allowance entitlement, or an entitlement to enhanced protection, to reduce or eliminate a liability to a lifetime allowance charge on the payment of the serious ill-health lump sum. This requirement is explained in more detail in RPSM12301080.

A scheme administrator failing to make the required report will become liable to penalties – see RPSM12100020