SCHEDULES
SCHEDULE 4Pensions: F1lump sum allowance and lump sum and death benefit allowance: transitional provision
C1PART 2“Individual protection 2016”
Sch. 4 Pt. 2 modified (6.4.2023) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023 (S.I. 2023/113), regs. 1(2), 37, 38 (with reg. 1(3))
The protection
9
1
Sub-paragraph (2) applies at any particular time on or after 6 April 2016 in the case of an individual if—
a
the individual has one or more relevant arrangements (see sub-paragraph (3)) on 5 April 2016,
b
the individual's relevant amount at the particular time is greater than £1,000,000 (see sub-paragraphs (4) and (7)),
c
paragraph 7 of Schedule 36 to FA 2004 (primary protection) does not F3apply on 6 April 2016 in relation to the individual,
d
none of the provisions listed in sub-paragraph (5) applies in the individual's case at the particular time, and
e
at the particular time or any later time, the individual has a reference number (see Part 3 of this Schedule) for the purposes of sub-paragraph (2).
F22
Chapter 15A of Part 9 of ITEPA 2003 (pension income: lump sums under registered pension schemes) has effect in relation to the individual as if—
a
the amount specified in section 637P of that Act (individual’s lump sum allowance) were the lower of—
i
25% of the individual’s relevant amount;
ii
£312,500, and
b
the amount specified in section 637R of that Act (individual’s lump sum and death benefit allowance) were the lower of—
i
the individual’s relevant amount;
ii
£1,250,000.
3
“Relevant arrangement”, in relation to an individual, means an arrangement relating to the individual under—
a
a registered pension scheme of which the individual is a member, or
b
a relieved non-UK pension scheme of which the individual is a relieved member.
4
An individual's “relevant amount” is the sum of amounts A, B, C and D (see paragraphs 10 to 13, but see also sub-paragraph (7)).
5
The provisions mentioned in sub-paragraph (1)(d) are—
a
paragraph 12 of Schedule 36 to FA 2004 (enhanced protection);
b
paragraph 14 of Schedule 18 to FA 2011 (fixed protection 2012);
c
paragraph 1 of Schedule 22 to FA 2013 (fixed protection 2014);
d
paragraph 1(2) of Schedule 6 to FA 2014 (individual protection 2014);
e
paragraph 1(2) of this Schedule (fixed protection 2016).
6
Sub-paragraph (7) applies if rights of an individual under a relevant arrangement become subject to a pension debit where the transfer day falls on or after 6 April 2016.
7
For the purpose of applying sub-paragraph (2) in the case of the individual on and after the transfer day, the individual's relevant amount is reduced (or further reduced) by the following amount—
where—
X is the appropriate amount,
Y is 5% of X, and
Z is the number of tax years beginning after 5 April 2016 and ending on or before the transfer day.
(If the formula gives a negative amount, it is to be taken to be nil.)
8
In sub-paragraphs (6) and (7) “appropriate amount” and “transfer day”, in relation to a pension debit, have the same meaning as in section 29 of WRPA 1999 or Article 26 of WRP(NI)O 1999 (as the case may be).
Words in Sch. 4 heading substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 93(2), 124 (with Sch. 9 paras. 125-132)