Paragraph 34A F1

for section 637A (pension commencement lump sums), there were substituted—

“Pension commencement lump sums

637A

(1)

Subject to subsection (2), no liability to income tax arises on a pension commencement lump sum paid under a registered pension scheme.

(2)

If—

(a)

a pension commencement lump sum is paid under a registered pension scheme, and

(b)

the lump sum exceeds the amount of the member’s lump sum and death benefit allowance that is available on the member becoming entitled to it,

section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme.”;

in section 637Q (availability of individual’s lump sum allowance), for subsection (6) there were substituted—

“(6)

In subsection (5) “non-taxable amount”, in relation to the individual becoming entitled to a pension commencement lump sum, means the lower of—

(a)

so much (if any) of the lump sum as is not subject to the charge to income tax by virtue of any provision of this Chapter, and

(b)

the amount given by the formula—

$$\frac{C+D}{4}$$

where C and D have the same meaning as in F2sub-paragraph (2) of paragraph 2 of Schedule 29 to FA 2004 (definition of “the permitted maximum”) as that paragraph applies in relation to the lump sum.

(6A)

In subsection (5) “non-taxable amount”, in relation to the individual becoming entitled to an uncrystallised funds pension lump sum, means so much (if any) of the lump sum as is not subject to the charge to income tax by virtue of any provision of this Chapter.”.