RPSM09104930 - Technical Pages: Member benefits: Lump sums: Trivial commutation lump sum: What benefits may be commuted

If the lump sum was paid on or after 6 April 2011 you should first read RPSM09105085.

What benefits may be commuted on the grounds of triviality?

Both uncrystallised rights and pensions in payment may be commuted this way. However, the same conditions must be met in each case.

Where crystallised rights are paid as a trivial commutation lump sum the whole payment will be taxed as pension income. Where uncrystallised rights are commuted, only part of the payment will be taxed as pension income - see RPSM09105080.

Where specifically identifiable contingent dependant benefits/rights exist, these too must be commuted with the member’s benefits. They must be included when valuing the member’s pension rights (see RPSM09104920).