RPSM09104850 - Technical Pages:
Member benefits: Lump sums: Refund of excess contributions lump
sum: Taxation
Taxation issues
| [Para 11, Sch 31][Ch15A, s636A, ITEPA 2003] |
A
refund of excess contributions lump sum is not
subject to any income tax charge. It is paid tax-free. This
reflects the fact that no tax relief has been granted on the
contributions being refunded in the first place.
Interest
Interest which forms part of the lump sum (see
RPSM09104820) is taxed as part of
the lump sum (see above).
Any interest paid in addition to the lump sum which qualifies
as a
scheme administration member payment – see
RPSM09104830 – is taxed under
section 369 Income Tax (Trading and Other Income) Act 2005
(formerly Case III Schedule D)..
If the payment does not qualify as a scheme administration
member payment or any of the other types of authorised member
payments, it is an
unauthorised member payment.
RPSM04104020 and
RPSM04104040 deals with the taxation
of such payments.
