PART 8Compensation cap modifications
Disregard of certain small payments in determining PPF compensation cap23
1
For the purposes of paragraph 26 of Schedule 7 to the Act(compensation cap), in determining the restriction under that paragraph on the compensation to which a person is entitled in respect of a benefit under a scheme, a lump sum within sub-paragraph (6B)(b) of that paragraph (lump sums to which the person has previously become entitled) is to be disregarded if—
a
b
its payment does not contravene any trivial commutation restriction that applies in the circumstances in question.
2
In this regulation “trivial commutation restriction” means a restriction imposed by—
a
regulation 19, 20 or 60 of the Occupational Pension Schemes (Contracting-out) Regulations 1996 M2;
b
regulation 2 of the Occupational Pension Schemes (Assignment, Forfeiture, Bankruptcy etc.) Regulations 1997 M3; or
c
regulation 3(2)(b) of the Pension Sharing (Pension Credit Benefit) Regulations 2000 M4.
3
Before 6th April 2006 this regulation applies with the modifications in paragraphs (4) and (5).
4
For paragraph (1)(a) substitute—
a
it extinguishes the person's entitlement to benefits under the scheme;
aa
its payment does not contravene Revenue restrictions; and;
5
After paragraph (2) insert—
3
For the purposes of this regulation a payment does not contravene Revenue restrictions if—
a
in the case of a scheme that is an approved scheme for the purposes of Chapter 1 of Part 14 of the Income and Corporation Taxes Act 1988 M5 (see section 612(1) of that Act), it is permitted under the scheme rules in accordance with its approval for those purposes; and
b
in the case of scheme that is a relevant statutory scheme for those purposes (see section 611A of that Act M6), it is permitted under the regulations or rules governing the scheme as such a scheme.