The Registered Pension Schemes (Authorised Payments) Regulations 2009

Prescribed payments and taxation

3.  A payment by a registered pension scheme to or in respect of a member that is described in Part 2 of these Regulations—

(a) is a payment of a prescribed description for the purposes of section 164(1)(f) (authorised member payments);

(b) if paid to the member, shall be treated as a trivial commutation lump sum paid to the member for the purposes of Part 9 of ITEPA 2003 (pension income)(1); and

(c) if not paid to the member, shall be treated as a trivial commutation lump sum death benefit paid to the recipient for the purposes of Part 9 of ITEPA 2003(2).

(1)

Section 280(1) of the Finance Act 2004 defines “ITEPA 2003” as meaning the Income Tax (Earnings and Pensions) Act 2003 (c. 1). Section 636B of ITEPA 2003, which makes provision about the taxation as pension income of trivial commutation lump sums, was inserted by paragraph 11 of Schedule 31 to the Finance Act 2004, and was amended by paragraph 59 of Schedule 10 to the Finance Act 2005 (c. 7).

(2)

Section 636C of ITEPA 2003, which makes provision about the taxation as pension income of trivial commutation lump sum death benefits, was inserted by paragraph 11 of Schedule 31 to the Finance Act 2004.