SCHEDULES

C1C3SCHEDULE 36Pension schemes etc: transitional provisions and savings

Annotations:
Modifications etc. (not altering text)
C1

Sch. 36 modified by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), art. 23D (as inserted (1.6.2009) by S.I. 2009/1172, arts. 1, 3)

C2Part 2Pre-commencement rights: F1enhancement of allowances etc

Annotations:
Amendments (Textual)
F1

Words in Sch. 36 Pt. 2 heading substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 66, 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4)

Modifications etc. (not altering text)
C2

Sch. 36 Pt. 2 applied (with modifications) (1.5.2010) by The Financial Assistance Scheme (Tax) Regulations 2010 (S.I. 2010/1187), regs. 1(1), 5-11

Pre-commencement pension credits

F218

1

This paragraph applies in the case of an individual where—

a

before 6th April 2006, the individual has acquired rights under a pension scheme within paragraph 1(1) by virtue of having become entitled to a pension credit,

b

notice of intention to rely on this paragraph is given to His Majesty’s Revenue and Customs in accordance with regulations made by the Commissioners for His Majesty’s Revenue and Customs, and

c

paragraph 7 (primary protection) does not apply in relation to the individual.

2

Chapter 15A of Part 9 of ITEPA 2003 (pension income: lump sums under registered pension schemes) has effect, in relation to a relevant benefit crystallisation event within the meaning of section 637Q of ITEPA 2003 (availability of individual’s lump sum allowance) occurring in relation to the individual, as if the amount specified in section 637P of ITEPA 2003 (individual’s lump sum allowance) were the lower of—

a

an amount equal to £268,275 increased by the pre-commencement pension credit factor calculated under sub-paragraph (5), and

b

£375,000.

3

A lump sum and death benefit allowance enhancement factor operates in relation to the relevant benefit crystallisation event mentioned in paragraph 6A(1).

4

The lump sum and death benefit allowance enhancement factor is the pre-commencement pension credit factor calculated under sub-paragraph (5).

5

The pre-commencement pension credit factor is—

where A is the amount which is the appropriate amount for the purposes of section 29(1) of WRPA 1999 or Article 26(1) of WRP(NI)O 1999 in relation to the pension credit, as increased by the percentage specified in sub-paragraph (6).

6

The percentage is the percentage by which the retail prices index for April 2006 is greater than that for the month in which the rights were acquired.

7

Where this paragraph applies in the case of an individual, for the purposes of this Part a lump sum is not an uncrystallised funds pension lump sum (see paragraph 4A of Schedule 29) if, immediately before the lump sum is paid, the amount given by the formula in sub-paragraph (8) is less than 25% of the lump sum.

8

The formula is—

where—

  • A is—

    1. a

      in the case of an individual in relation to whom a relevant protection provision applies, the individual’s protected lump sum and death benefit allowance (see paragraph 6A(4));

    2. b

      in any other case, £1,073,100;

  • B is the amount that would be the previously-used amount within the meaning of section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance) if a relevant benefit crystallisation event within the meaning of that section had occurred immediately before the lump sum is paid.