Finance Act 2013

PART 2 U.K. Other provision

5 U.K. Part 4 of FA 2004 (pension schemes) is amended as follows.

6 (1) Section 218 (standard lifetime allowance etc) is amended as follows. U.K.

(2) After subsection (5B) insert—

“(5BA) Where the operation of a lifetime allowance enhancement factor is provided for by any of sections 220, 222, 223 and 224 and the time mentioned in the definition of SLA in the section concerned fell within the period consisting of the tax year 2012-13 and the tax year 2013-14, subsection (4) has effect as if the amount to be multiplied by LAEF were £1,500,000 if that is greater than SLA.

(5BB) Where more than one lifetime allowance enhancement factor operates, subsection (5BA) does not apply if subsection (5A) or (5B) applies.”

(3) After subsection (5C) insert—

“(5D) Where benefit crystallisation event 7 occurs on or after 6 April 2014 by reason of the payment of a relevant lump sum death benefit in respect of the death of the individual during the period consisting of the tax year 2012-13 and the tax year 2013-14, the standard lifetime allowance at the time of the benefit crystallisation event is £1,500,000.”

(4) The amendments made by this paragraph have effect for the tax year 2014-15 and subsequent tax years.

7 (1) In section 219 (availability of individual's lifetime allowance) after subsection (5) insert— U.K.

“(5A) If paragraph 7 of Schedule 36 (primary protection) makes provision for a lifetime allowance enhancement factor in relation to the individual, subsection (5) has effect as if CSLA were £1,500,000 if that is greater than CSLA.”

(2) The amendment made by this paragraph has effect for cases in which the time of the current benefit crystallisation event falls on or after 6 April 2014.

8 (1) Part 1 of Schedule 29 (authorised lump sums: lump sum rule) is amended as follows. U.K.

(2) In paragraph 2 (which applies for the purpose of determining pension commencement lump sums) after sub-paragraph (8) insert—

“(9) Sub-paragraph (10) applies if the member is a protected individual (but not if this paragraph applies with the modifications set out in paragraph 27 or 28 of Schedule 36).

(10) Sub-paragraphs (6) and (7) have effect as if CSLA were £1,500,000 if that is greater than CSLA.

(11) The member is a “protected individual” if—

(a) paragraph 7 of Schedule 36 (primary protection) makes provision for a lifetime allowance enhancement factor in relation to the member, or

(b) at the time the member becomes entitled to the lump sum, paragraph 12 of that Schedule (enhanced protection) applies in relation to the member.”

(3) The amendment made by sub-paragraph (2) has effect for cases in which the member becomes entitled to the lump sum on or after 6 April 2014.

(4) In paragraph 8 (which applies for the purpose of determining trivial commutation lump sums) for sub-paragraphs (2) and (3) substitute—

“(2) The adjustment referred to in sub-paragraph (1)(a) is the multiplication of the value of the member's relevant crystallised pension rights on 5 April 2006 by—

where CL is the commutation limit on the nominated date.

(3) The adjustment referred to in sub-paragraph (1)(b) is the multiplication of the amount crystallised by a previous benefit crystallisation event by—

where—

CL is the commutation limit on the nominated date, and

BCL is the commutation limit when the previous benefit crystallisation event occurred.”

(5) The amendment made by sub-paragraph (4) has effect for cases in which the nominated date falls on or after 6 April 2014.