C1C2C3C4C5C7C8C9C10Part 4Pension schemes etc

Annotations:
Modifications etc. (not altering text)
C8

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)

C10

Pt. 4 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 35 para. 18

C10Chapter 5Registered pension schemes: tax charges

Lifetime allowance charge

I1C6C11218Individual’s lifetime allowance and standard lifetime allowance

1

Subject as follows, the individual’s lifetime allowance is the standard lifetime allowance.

2

The standard lifetime allowance for the tax year 2006-07 is £1,500,000.

3

The standard lifetime allowance for each subsequent tax year is such amount, not being less than the standard lifetime allowance for the immediately preceding tax year, as is specified by order made by the Treasury.

4

Where one or more lifetime allowance enhancement factors operate in relation to a benefit crystallisation event occurring in relation to the individual, the individual’s lifetime allowance at the time of the benefit crystallisation event is—

SLA+(SLA×LAEF)math

where—

SLA is the standard lifetime allowance at the time of the benefit crystallisation event, and

LAEF is the lifetime allowance enhancement factor which operates with respect to the benefit crystallisation event and the individual or (where more than one so operates) the aggregate of them.

5

The following make provision for the operation of lifetime allowance enhancement factors—

  • section 220 (pension credits from previously crystallised rights),

  • sections 221 to 223 (individuals who are not always relevant UK individuals),

  • sections 224 to 226 (transfers from recognised overseas pension schemes),

  • paragraphs 7 to 11 of Schedule 36 (primary protection), and

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

6

Paragraph 19 of that Schedule makes provision for the reduction of what would otherwise be the individual’s lifetime allowance in certain cases where the individual is permitted to take pension before normal minimum pension age.

7

In this Part references (however expressed) to a person’s lifetime allowance at any time are to what would be the person’s lifetime allowance, calculated in accordance with this section, if a benefit crystallisation event occurred in relation to the person at that time.