The Taxation of Pension Schemes (Transitional Provisions) (Amendment No. 2) Order 2006
This order amends articles 25 and 26 of The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (SI 572/2006). It provides revised rules for the calculation of stand-alone lump sums. These are lump sums paid under transitional protection which constitute the whole of a persons rights under the pension scheme. The order sets out the circumstances in which such lump sums can be paid and provides rules covering transfers.
This order plugs various loopholes that could allow some individuals to take much larger tax-free lump sums than the legislation intends. To prevent the possibility of forestalling its provisions this order came into force on the 25 July 2006 which was shortly after it was laid.. This Order works in the way that the original Order was intended to work in line with announced policy, and will not therefore affect those paying lump sums in normal circumstances.
