RPSM13102560 - Technical Pages: International: Application of charges to non-UK schemes: Lifetime allowance: Example 2 of the relevant relieved amount

Example 2 of the relevant relieved amount

Ruth has been a member of a money purchase corresponding scheme since 2000 and transitional corresponding relief has been given on contributions made by and in respect of her after 5 April 2006. She has no UK tax-relieved funds in any other scheme. She retires in the 2010/11 tax year and takes the whole of her fund of £2 million in the form of a pension.

Contributions made by and in respect of her before 6 April 2006 amounted to £800,000, and the investment return on that up to her retirement was £350,000.

UK tax-relieved contributions made by and in respect of her after 5 April 2006 amounted to £700,000, and the investment return on that was £150,000.

The untested portion of her relevant relieved amount is £700,000. That is the total of the pension input amounts for the tax years after 5 April 2006, and there has been no previous benefit crystallisation event.

The amount crystallised is reduced by £1.3 million as that is the amount by which it exceeds the untested portion of her relevant relieved amount. The resulting amount of £700,000 is tested against her lifetime allowance of £1.8 million so she is not liable to a lifetime allowance charge.