RPSM12301080 - Scheme Administrator Pages: Information requirements and administration: Information the scheme administrator is required to provide to HMRC: The Event Report: Event number 6 - Benefit crystallisation events and lifetime allowance protection
Event number 6 - Benefit crystallisation events and enhanced lifetime allowance, enhanced protection or fixed protection
[Reg. 3 The Registered Pension Schemes (Provision of Information) Regulations 2006 - SI 2006/567]
Reportable event
Reportable event 6 occurs when
- a member’s benefit crystallisation event (that’s BCEs 1 - 6 and 8 - 9) takes place that, either alone or combined with other amounts crystallised by that person, exceeds the standard lifetime allowance for the year in question, and
- the member relies on either an enhanced lifetime allowance, enhanced protection or, for tax year 2012-13 and subsequent years, fixed protection in order to reduce or eliminate the lifetime allowance charge.
A BCE becomes reportable at the point total BCEs are more than the standard lifetime allowance. The BCEs reportable are any BCEs over the standard lifetime allowance.
Example
Corrine has primary protection and a protected lump sum right of £700,000. In September 200 Corrine crystallises a scheme pension with a value of £1 million. She has had no previous BCEs and had no benefits in payment before 6 April 2006. The standard lifetime allowance for 2008/09 is £1.65 million and as Corrine has only crystallised benefits worth £1 million this BCE is not reportable.
In December 2009 Corrine crystallises a pension commencement lump sum (PCLS) of £300,000 and a lifetime annuity with a value of £400,000. The standard lifetime allowance for 2009/10 is £1.75 million. The BCE from 2008/09 used up 60.6% of the standard lifetime allowance, which leaves 39.4% or £689,500 left of the standard lifetime allowance before the latest set of benefit crystallisations. Corrine has now crystallised more than the standard lifetime allowance. The PCLS automatically crystallises before the pension, so at this point Corrine has £389,500 standard lifetime allowance available. It is the pension BCE that goes over the standard lifetime allowance level, so only the last pension BCE needs to be reported.
If Corrine had taken her maximum PCLS of £700,000 plus the £400,000 pension both the BCE 6 in respect of the PCLS and the BCE 4 in respect of the lifetime annuity would be reportable as both BCEs go over the level of the standard lifetime allowance.
In ether case the PCLS must be reported on the event report as a reportable event 8 (see RPSM12301100).
Information required
The information that must be provided on the event report for reportable event 6 is
- the name of the member
- their National Insurance number ,
- the reference number given by HM Revenue & Customs in connection with the protection relied upon in order to reduce or eliminate the lifetime allowance charge
- the amount crystallised by the event, and
- the date of the event.
Where more than one BCE is reportable for a member you need to record more than one event for that member. So in the example above where Corrine receives a PCLS of £700,000 2 events should be reported for her.
See RPSM12301295 for what to do if the individual does not give the scheme administrator their National Insurance number.
What the event report looks like on Pension Schemes Online
Having brought the event report summary page up, click on ‘Go to reportable fund movements’ on the right hand side of the screen. This brings up the following screen.
Event report page for reportable fund movements
| Glossary (RPSM20000000) |
