Part 4

Pension schemes etc
Chapter 3

Payments by registered pension schemes

Borrowing

Unauthorised borrowing: money purchase arrangements other than collective money purchase arrangements
182
1
A registered pension scheme is not authorised to borrow an amount in respect of a money purchase arrangement that is not a collective money purchase arrangement unless the arrangement borrowing condition is met.
2
The arrangement borrowing condition is met if—
(APB + PB) < VA/2
where—
APB is the aggregate of the amounts previously borrowed in respect of the arrangement (excluding any amounts which have been repaid),
PB is the amount proposed to be borrowed in respect of the arrangement, and
VA is the value of the arrangement.
3
The value of the arrangement is the aggregate of—
a
the amount of such of the sums and the market value of such of the assets as represent the member's drawdown pension fund in respect of the arrangement (if any),
aa
the amount of such of the sums and the market value of such of the assets as represent the member's flexi-access drawdown fund in respect of the arrangement (if any),
b
the amount of such of the sums and the market value of such of the assets as represent dependants' drawdown pension funds or dependants' flexi-access drawdown funds in respect of the arrangement (if any),
ba
the amount of such of the sums and the market value of such of the assets as represent nominees' flexi-access drawdown funds in respect of the arrangement (if any),
bb
the amount of such of the sums and the market value of such of the assets as represent successors' flexi-access drawdown funds in respect of the arrangement (if any),
c
the aggregate of the value of each scheme pension or dependants' scheme pension payable in respect of the arrangement, and
d
the value of the uncrystallised rights under the arrangement.
4
The value of a scheme pension or dependants' scheme pension payable in respect of the arrangement is—
RVF × ARP
where—
RVF is the relevant valuation factor (see section 276), and
ARP is the annual rate at which the pension is payable.
5
Rights are uncrystallised if no-one has become entitled to the present payment of benefits in respect of the rights; and a person is to be treated as entitled to the present payment of benefits in respect of the sums and assets representing the person’s drawdown pension fund or the person's flexi-access drawdown fund.
6
If the arrangement is a cash balance arrangement, the value of the uncrystallised rights under the arrangement is the amount which would, on the valuation assumptions (see section 277), be available for the provision of benefits in respect of those rights if a person became entitled to benefits in respect of those rights.
7
If the arrangement is a money purchase arrangement other than a cash balance arrangement, the value of the uncrystallised rights under the arrangement is the aggregate of the amount of such of the sums, and the market value of such of the assets, held for the purposes of the arrangement as represent those rights.
8
If the arrangement is a hybrid arrangement under which either cash balance benefits or other money purchase benefits (but not defined benefits or collective money purchase benefits) may be provided, the value of the uncrystallised rights under the arrangement is the greater of—
a
their value calculated under subsection (6) (on the assumption that cash balance benefits are provided), and
b
their value calculated under subsection (7) (on the assumption that other money purchase benefits are provided).
Pt. 4 modified (N.I.) (1.4.2006) by The Firemens Pension Scheme Order (Northern Ireland) 2006 (S.R. 2006/210), arts. 1(2), 103
Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 9, 10
Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 12
Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 13(5)
Ss. 182-185 excluded (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 16
Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 26
Ss. 160-274, 281, Schs. 30-35 in force at 6.4.2006 but any power to make an order or regulations under those provisions may be exercised at any time after Royal Assent, see s. 284
Pt. 4 modified (31.12.2007) by Police and Justice Act 2006 (c. 48), s. 53(1), Sch. 3 para. 7; S.I. 2007/3203, art. 3(b)
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)
Pt. 4 modified by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), reg. 5A (as inserted (6.4.2006) by S.I. 2008/2990, arts. 1(1), 3)
Pt. 4 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 35 para. 18
S. 182 restricted (retrospective to 6.4.2011) by Finance Act 2011 (c. 11), s. 68(1)(6)
S. 182 modified (retrospective to 6.4.2011) by Finance Act 2011 (c. 11), s. 68(2)(6)
Pt. 4 modified (19.7.2011) by Finance Act 2011 (c. 11), Sch. 18 para. 14(3)
Words in s. 182(3)(a) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 70(2)(a)
Words in s. 182(3)(b) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 70(2)(b)
Words in s. 182(5) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 70(3)
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)
Pt. 4 modified (17.7.2014) by Finance Act 2014 (c. 26), Sch. 6 para. 1(2)(3)
Pt. 4: power to amend conferred (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), s. 4(3)
S. 182(3)(aa) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 11(a)
Words in s. 182(3)(b) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 11(b)
S. 182(3)(ba)(bb) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 13
Words in s. 182(5) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 12
Pt. 4 modified (15.9.2016) by Finance Act 2016 (c. 24), Sch. 4 para. 1
Pt. 4 modified (15.9.2016) by Finance Act 2016 (c. 24), Sch. 4 para. 9(2)
Words in s. 182 heading inserted (1.8.2022) by Finance Act 2021 (c. 26), Sch. 5 paras. 6(2), 25(1); S.I. 2022/874, reg. 2
Words in s. 182(1) inserted (1.8.2022) by Finance Act 2021 (c. 26), Sch. 5 paras. 6(3), 25(1); S.I. 2022/874, reg. 2
Words in s. 182(8) inserted (1.8.2022) by Finance Act 2021 (c. 26), Sch. 5 paras. 6(4), 25(1); S.I. 2022/874, reg. 2
Pt. 4 modified (with effect in relation to the tax year 2024-25 and subsequent tax years) by The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52), regs. 1(2)(3), 6