Regulation 14 The Taxation of Pension Schemes (Transitional Provisions) Order 2006

(1)

The Taxation of Pension Schemes (Transitional Provisions) Order 2006^f1 is amended as follows.

(2)

In article 23 (modification of paragraph 34 of Schedule 36), in paragraph (2), in the modified paragraph 2(1) of Schedule 29, in the definition of B, for “(5)” substitute “(7)”.

(3)

In article 23D (modifications of Schedule 36 to FA 2004), after paragraph (2) insert—

“(3)

In paragraph 34(3), in the modified paragraph 2 of Schedule 29, in sub-paragraph (2), for the definition of D substitute—

““D” is—

(a)

in a case in which the lump sum is paid in connection with the individual becoming entitled to a trivial commutation lump sum^f2 within paragraph 7A of Schedule 29, the amount of the trivial commutation lump sum;

(b)

otherwise, the relevant capital amount in relation to the relevant pension (see sub-paragraph (6));”.”

(4)

In article 25 (stand-alone lump sums: introductory and definition), in paragraph (2), for “article 25C deals” substitute “articles 25C to 25CC deal”.

(5)

In article 25CA (circumstance A: tax treatment of stand-alone lump sums), after paragraph (4) insert—

“(5)

Section 637U of ITEPA 2003 (availability of individual’s allowances where lump sums or lump sum death benefits already paid by non-UK schemes)^f3 has effect as if references in that section to a pension commencement lump sum included a stand-alone lump sum.”

(6)

In article 25CB (circumstance B: tax treatment of stand-alone lump sums), after paragraph (4) insert—

“(5)

Section 637U of ITEPA 2003 (availability of individual’s allowances where lump sums or lump sum death benefits already paid by non-UK schemes) has effect as if references in that section to a pension commencement lump sum included a stand-alone lump sum.”

(7)

In article 25CC (circumstance C: tax treatment of stand-alone lump sums), after paragraph (5) insert—

“(6)

Section 637U of ITEPA 2003 (availability of individual’s allowances where lump sums or lump sum death benefits already paid by non-UK schemes) has effect as if references in that section to a pension commencement lump sum included a stand-alone lump sum.”

(8)

In article 25D (stand-alone lump sums: further provisions)—

(a)

in paragraph (2), omit the second sentence;

(b)

for paragraph (3) substitute—

“(3)

In paragraph (2) “the stand-alone lump sum maximum” means—
$A - B$
where—

“A” has the same meaning as in the modified paragraph 2 of Schedule 29 contained in paragraph 28(3) of Schedule 36;

“B” has the same meaning as in that modified paragraph 2, but reading references in it to a pension commencement lump sum as including a stand-alone lump sum.”

Annotations

Footnotes

f1: S.I. 2006/572. Article 23 was substituted by S.I. 2024/1167. Article 23D (amongst other provisions) was inserted by S.I. 2009/1172 and was amended by S.I. 2024/1012 and 2024/1167. Articles 25 and 25D (amongst other provisions) were substituted by S.I. 2006/2004. Article 25 was amended by S.I. 2011/1782. Article 25D was amended by paragraph 95 of Schedule 9 to FA 2024. Articles 25CA, 25CB and 25CC were inserted by paragraph 95 of Schedule 9 to FA 2024. Articles 25CA and 25CC were amended by S.I. 2024/356, 2024/1012 and 2024/1167. Article 25CB was amended by S.I. 2024/356.
f2: “Trivial commutation lump sum” is defined in paragraph 7 of Schedule 29 to FA 2004.
f3: Section 637U of ITEPA 2003 was inserted by regulation 2(6) of these Regulations.