SAM110270 - Repayments: issue repayment: in-year repayments - trivial commutations

A trivial commutation is where a customer chooses to change a small pension into a lump sum.

Because of the way in which PAYE operates, the tax deducted from the trivial commutation payment may actually exceed the customer’s liability and/or be excessive because higher rate tax, rather than basic rate tax is deducted.

Most taxpayers who receive trivial commutation payments have little or no other taxable income and tax should be charged at basic rate.

From April 2009 onwards, SA customers can request and receive early repayments in trivial commutation cases as long as the appropriate information has been provided. Where a trivial commutation claim is made by the customer, a form P53 should be issued.

The form P53 can be obtained from the SEES menu under Forms and Letters.