RPSM13100230 - Technical Pages: International: Enhancement: Non-residence factor: Benefit payment

Notifying details of the non-residence factor when benefits are paid

If an individual intends to rely on a non-residence factor, they will have to notify the scheme administrator of their registered pension scheme when a benefit crystallisation event occurs. The individual will need to provide the administrator with the unique reference number and the enhancement factor details shown on the certificate.

The administrator will have to include information about the benefit crystallisation event on the Event Report that is made to HMRC (see RPSM12301110). The administrator will need also to account for any lifetime allowance charge on the quarterly Accounting for Tax return to HMRC.

If an individual has not notified HMRC of an entitlement to a non-residence factor before a benefit crystallisation event occurs a lifetime allowance charge may arise and the scheme administrator may have paid the tax due. If the individual subsequently provides the administrator of their registered pension scheme with the unique reference number and the enhancement factor details shown on the certificate, the administrator may then send an amended Accounting for Tax return to HMRC and obtain a repayment.

If an individual who is a member of a defined benefits arrangement (see RPSM13100280) thinks that a non-standard factor should be used to value their pension entitlement, they should submit form APSS 202 as normal, together with a covering letter. A certificate will initially be issued using the standard valuation factor of 20. However, if HMRC has agreed a different valuation factor then this can be amended subsequently.