RPSM09104750 - Technical Pages: Member benefits: Lump sums: Short service refund lump sum: Lifetime allowance

A short service refund lump sum and the lifetime allowance

The payment of a short service refund lump sum does not trigger a lifetime allowance test. So the payment is not caught through BCE 6, and no amount crystallises for lifetime allowance purposes. Also, unlike the other authorised member lump sum payments, the member does not have to have available lifetime allowance in order for such payments to be made.

As such, a short service refund lump sum can be paid where the member has used up all their lifetime allowance (although no earlier BCE can have occurred under that scheme in relation to the member). Given that no benefits crystallise for lifetime allowance purposes when the lump sum payment is made, there will never be a chargeable amount and so no lifetime allowance charge.