SCHEDULES
SCHEDULE 5Pension flexibility
Trivial commutation lump sum
7
1
Paragraph 7 of Schedule 29 to FA 2004 (interpretation of lump sum rule: meaning of “trivial commutation lump sum”) is amended as follows.
2
In sub-paragraph (1)(aa) (sum must be paid in respect of a defined benefits arrangement), after “arrangement,” insert “
or in respect of a scheme pension payable by the scheme administrator to which the member has become entitled under a money purchase arrangement (an “in-payment money-purchase in-house scheme pension”), or partly in respect of the former and partly in respect of the latter,
”
.
3
In sub-paragraph (1)(d) (sum must extinguish member's entitlement to defined benefits under the scheme), after “defined benefits” insert “
, and any entitlement to payments of in-payment money-purchase in-house scheme pensions,
”
.
8
1
Section 636B of ITEPA 2003 (taxation of trivial commutation, and winding-up, lump sums) is amended as follows.
2
In subsection (3) (taxation of lump sum where member has uncrystallised rights under the pension scheme)—
a
in the words before paragraph (a) omit “(within the meaning of section 212 of FA 2004)”, and
b
in paragraph (b), for “the uncrystallised rights calculated in accordance with that section” substitute “
any uncrystallised rights extinguished by the lump sum
”
.
3
After subsection (4) insert—
5
In this section “uncrystallised rights” has the same meaning as in section 212 of FA 2004; and the value for the purposes of this section of any uncrystallised rights is to be calculated in accordance with that section.
9
The amendments made by paragraphs 7 and 8 have effect in relation to lump sums paid after the day on which this Act is passed.