RPSM11101080 - Technical Pages: Lifetime allowance: Level of lifetime allowance:

Notifying an entitlement to a lifetime allowance enhancement factor

[The Registered Pension Schemes (Enhanced Lifetime Allowance) Regulations 2006 SI 2006 No. 131][Reg 3, ‘event report 6’, and Reg 11, The Registered Pension Schemes (Provision of Information) Regulations 2006SI 2006 No. 567]

If a member believes they are entitled to a lifetime allowance enhancement factor they must obtain a certificate confirming this entitlement from HMRC. This is required by the Pension Schemes (Enhanced Lifetime Allowance) Regulations 2006.

Once the enhancement is notified HMRC will provide the individual with a certificate confirming the level of lifetime allowance enhancement factor they are entitled to. This certificate will be given a reference number by HMRC.

The member must inform the scheme administrator before a BCE where they intend to rely on an enhanced lifetime allowance at that BCE in order to negate or reduce a liability to a lifetime allowance charge. The member must evidence their entitlement to the scheme administrator by quoting the reference number given on the certificate.

Where an entitlement to an enhanced lifetime allowance is being relied on at a BCE to negate all (or part) of a lifetime allowance charge liability the scheme administrator must report this fact to HMRC. One of the things the scheme administrator must tell HMRC is the reference number quoted by the member evidencing their entitlement to an enhanced lifetime allowance (or enhanced protection). This will enable HMRC to undertake compliance checks to ensure the correct position has been stated.

If a member makes a fraudulent or negligent claim in respect of an entitlement to an enhanced lifetime allowance then they will become liable to a significant penalty.