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1

Paragraph 2 of Schedule 29 (pension commencement lump sums: definition of “permitted maximum”) applies as if the permitted maximum were—

$\left(A\times 1.2\right)+B$

where—

• A is the value of the individual’s uncrystallised lump sum rights under the pension scheme on 5th April 2006, calculated in accordance with paragraph 32;

• B is the additional lump sum amount.

2

The additional lump sum amount is—

$\frac{C+(D\times 4)-\left(E\times 0.7154\right)}{4}$

where—

• C is the pension commencement lump sum paid;

• D is the applicable amount in relation to the relevant pension (see paragraphs 2A to 2D of Schedule 29);

• E is the value of the individual’s uncrystallised rights under the pension scheme on 5th April 2006, calculated in accordance with paragraph 33.

3

For the purposes of section 637Q of ITEPA 2003 (availability of individual’s lump sum allowance), the “non-taxable amount” of a pension commencement lump sum paid to the individual is to be treated as an amount equal to the applicable amount in relation to the relevant pension.

4

Any part of what would otherwise be D or E which represents rights attributable to a disqualifying pension credit is to be disregarded.