4AUncrystallised funds pension lump sum

1

For the purposes of this Part a lump sum is an uncrystallised funds pension lump sum if—

a

it is paid on or after 6 April 2015 in respect of a money purchase arrangement,

b

it is paid when all or part of the member’s lifetime allowance is available,

c

it is paid when the member has reached normal minimum pension age (or the ill-health condition is met),

d

it is not a pension commencement lump sum,

e

it is not a lump sum that, for the purposes of Part 9 of ITEPA 2003 (pension income), is treated by regulations under section 164(1)(f) and (2) as a trivial commutation lump sum paid to the member,

f

immediately before the member becomes entitled to it, the sums or assets that are to be used to provide it—

i

represent rights of the member under the scheme that are uncrystallised rights as defined by section 212(1) and (2), but

ii

do not to any extent represent rights attributable to a disqualifying pension credit, and

g

none of sub-paragraphs (3) to (5) applies to the member.

2

But if a lump sum falling within sub-paragraph (1)—

a

is paid when the member has not reached the age of 75, and

b

exceeds the member’s available lifetime allowance,

the excess is not an uncrystallised funds pension lump sum.

3

This sub-paragraph applies to the member if—

a

paragraph 12 of Schedule 36 applies to the member (enhanced protection from 6 April 2006) immediately before the sum is paid, and

b

the lump sum condition (see paragraphs 24(2) and (3), 25 and 26 of Schedule 36) is met in relation to the member.

4

This sub-paragraph applies to the member if—

a

paragraph 7 of Schedule 36 makes provision for the operation of a lifetime allowance enhancement factor in relation to the member immediately before the sum is paid, and

b

the lump sum condition (see paragraphs 24(2) and (3), 25 and 26 of Schedule 36) is met in relation to the member.

5

This sub-paragraph applies to the member if—

a

any of the provisions listed in sub-paragraph (6) makes provision for the operation of a lifetime allowance enhancement factor in relation to the member immediately before the sum is paid, and

b

immediately before the sum is paid, the available portion of the member’s lump sum allowance for the purposes of paragraph 2 of Schedule 29 is nil or less than 25% of the sum.

6

The listed provisions are—

a

paragraph 7 of Schedule 36 (primary protection);

b

section 220 (pension credits from previously crystallised rights);

c

section 221 (non-residence arrangements);

d

section 224 (transfers from recognised overseas pensions schemes);

e

paragraph 18 of Schedule 36 (pre-commencement pension credits).

7

In sub-paragraph (1)(f) “disqualifying pension credit” is to be read in accordance with paragraph 2(3) and (4).