C1C3C4C5C6C8C9C10C11C13C14C15C16C17C18Part 4Pension schemes etc

Annotations:
Modifications etc. (not altering text)
C9

Pt. 4 modified (1.7.2008) (N.I.) (with effect in accordance with reg. 1 of the amending Rule) by The Health and Social Care (Pension Scheme) Regulations (Northern Ireland) 2008 (S.R. 2008/256), regs. 1, 124(1) (with regs. 134, 258)

C11

Pt. 4 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 35 para. 18

C13

Pt. 4 modified (19.7.2011) by Finance Act 2011 (c. 11), Sch. 18 para. 14(3)

C14

Pt. 4 applied (with modifications) (with application in accordance with Sch. 22 para. 1 of the amending Act) by Finance Act 2013 (c. 29), Sch. 22 para. 1(2)

C15

Pt. 4 modified (17.7.2014) by Finance Act 2014 (c. 26), Sch. 6 para. 1(2)(3)

C16

Pt. 4: power to amend conferred (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), s. 4(3)

C17

Pt. 4 modified (15.9.2016) by Finance Act 2016 (c. 24), Sch. 4 para. 1

C18

Pt. 4 modified (15.9.2016) by Finance Act 2016 (c. 24), Sch. 4 para. 9(2)

C11C13Chapter 5Registered pension schemes: tax charges

Lifetime allowance charge

I1C7C12215Amount of charge

1

The lifetime allowance charge is a charge in respect of the chargeable amount.

2

The lifetime allowance charge is a charge—

a

at the rate of 55% in respect of so much (if any) of the chargeable amount as constitutes the lump-sum amount, and

b

at the rate of 25% in respect of so much (if any) of the chargeable amount as constitutes the retained amount.

F42A

The Treasury may by order amend subsection (2) so as to vary the rates of the lifetime allowance charge.

2B

An order under subsection (2A) may make provision for there to be different rates in different circumstances.

3

The “chargeable amount” is the aggregate of—

a

the basic amount, and

b

any amount which is treated as forming part of the lump-sum amount under subsection (6) or of the retained amount under subsection (8).

4

The “basic amount”—

a

if the first lifetime allowance F3charge condition is met, is the amount by which the amount crystallised by the benefit crystallisation event exceeds the amount of the individual’s lifetime allowance available on it, and

b

if the second lifetime allowance charge condition is met, is the amount crystallised by the benefit crystallisation event.

5

The “lump-sum amount” is the aggregate of—

a

so much of the basic amount as is paid as a lump sum to the individual or a lump sum death benefit in respect of the individual, and

b

any amount which is treated as forming part of the lump-sum amount under subsection (6).

6

If and to the extent that the tax payable under this section on any of the lump-sum amount is covered by a scheme-funded tax payment, it is to be treated as itself forming part of the lump-sum amount.

7

The “retained amount” is the aggregate of—

a

so much of the basic amount as is not paid as a lump sum to the individual or a lump sum death benefit in respect of the individual, and

b

any amount which is treated as forming part of the retained amount under subsection (8).

8

If and to the extent that the tax payable under this section on any of the retained amount is covered by a scheme-funded tax payment, it is to be treated as itself forming part of the retained amount.

C29

An amount of tax payable under this section is “covered by a scheme-funded tax payment” if—

a

the tax is paid by the scheme administrator, F1...

F1b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F210

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

The chargeable amount is not to be treated as income for any purpose of the Tax Acts.