SCHEDULES
C5SCHEDULE 36Pension schemes etc: transitional provisions and savings
C4Part 2Pre-commencement rights: lifetime allowance charge
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 pensions
20
1
This paragraph makes provision about an individual who, on 5th April 2006, has an actual (rather than a prospective) right to the payment of one or more relevant existing pensions.
2
Section 219 (availability of individual’s lifetime allowance) applies as if, immediately before the first benefit crystallisation event occurring in relation to the individual—
a
a benefit crystallisation event had occurred in relation to the individual, and
C6b
the amount crystallised was the value of the individual’s pre-commencement pension rights immediately before the benefit crystallisation event.
3
The value of the individual’s pre-commencement pension rights at any time is—
where (subject to sub-paragraph (4)) ARP is an amount equal to—
(a) the annual rate at which the relevant existing pension is payable to the individual at that time, or
(b) if more than one relevant existing pension is payable to the individual at that time, the aggregate of the annual rates at which each of the relevant existing pensions is so payable.
C1C2C3F14
In the case of drawdown pension, ARP is—
a
F480% of the maximum amount that may be paid in the drawdown pension year in which the time falls in accordance with pension rule 5 (see section 165), or
b
in the case of an arrangement to which subsection (3A) of section 165 F2applied at any time before 6 April 2015 , F380% of the maximum amount that could have been paid in accordance with that rule in the drawdown pension year in which that subsection first applied to the arrangement if it had not so applied.
F5c
in the case of an arrangement to which section 165(3A) never applied but only if the time falls after the member's drawdown pension fund in respect of the arrangement is converted into the member's flexi-access drawdown fund in respect of the arrangement by the operation of any of paragraphs 8B to 8D of Schedule 28, 80% of the maximum amount that could have been paid in accordance with pension rule 5 in the drawdown pension year in which the conversion occurs had no conversion happened in that year by the operation of any of paragraphs 8B to 8D of Schedule 28.
, or
5
In this paragraph “relevant existing pension” has the same meaning as in paragraph 10(2); and paragraph 10(4) and (5) operates for the purposes of this paragraph for determining the annual rate at which a relevant existing pension is payable at any time (treating the references there to 5th April 2006 as to that time).
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)