# Finance Act 2004, Paragraph 7

Extent: E+W+S+N.I.

(1) For the purposes of this Part a lump sum is a trivial commutation lump sum if—
(a) it is paid when no trivial commutation lump sum has previously been paid to the member (by any registered pension scheme) or, if such a lump sum has previously been paid, before the end of the commutation period,
(aa) it is paid in respect of a defined benefits arrangement, or in respect of a collective money purchase arrangement, or in respect of a scheme pension payable by the scheme administrator to which the member has become entitled under a money purchase arrangement that is not a collective money purchase arrangement (an “in-payment money-purchase in-house scheme pension”), or in respect of any combination of such arrangements and scheme pensions,
(b) on the nominated date, the value of the member’s pension rights does not exceed the commutation limit,
(c) it is paid when all or part of the member’s lump sum allowance is available (see paragraph 12A),
(d) it extinguishes any entitlement to defined benefits , and any entitlement to collective money purchase benefits, , and any entitlement to payments of in-payment money-purchase in-house scheme pensions, that the member has under the pension scheme, and
(e) it is paid when the member has reached normal minimum pension age (or the ill-health condition is met) ....
(2) The commutation period is the period beginning with the day on which a trivial commutation lump sum is first paid to the member and ending 12 months after that day.
(3) The nominated date is the day within the period of three months ending with the first day of the commutation period nominated by the member (or, if no date is nominated, is the first day of the commutation period).
(4) The commutation limit is £30,000.
(4A) The Treasury may by order substitute for the amount for the time being specified in sub-paragraph (4) such larger amount as is specified in the order.
(5) The value of the member’s pension rights on the nominated date is the aggregate of—
(a) the value of the member’s relevant crystallised pension rights on that date (calculated in accordance with paragraph 8), and
(b) the value of the member’s uncrystallised rights on that date (calculated in accordance with paragraph 9).

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Source: https://www.legislation.gov.uk/ukpga/2004/12/schedule/29/paragraph/7 (the official version)
Page: https://openlegislation.uk/finance-act-2004/schedule-29/paragraph-7
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.