Paragraph 67 Amendments of Part 2 of Schedule 36 to FA 2004

Before paragraph 7 and the italic heading before it insert—

“Enhancement of lump sum allowance and lump sum and death benefit allowance

6A

(1)

Sub-paragraph (2) applies, in relation to a relevant benefit crystallisation event occurring in relation to an individual, other than the individual becoming entitled to a pension commencement lump sum or an uncrystallised funds pension lump sum, where one or more lump sum and death benefit allowance enhancement factors operate in relation to the relevant benefit crystallisation event.

(2)

Chapter 15A of Part 9 of ITEPA 2003 (pension income: lump sums under registered pension schemes) has effect in relation to the individual as if the amount specified in section 637R of that Act (individual’s lump sum and death benefit allowance) were an amount equal to—

$$A+\left(A\times B\right)$$

where—

• A is—

  1. (a)

     in the case of an individual in relation to whom a relevant protection provision applies (see sub-paragraph (3)), the individual’s protected lump sum and death benefit allowance (see sub-paragraph (4));

  2. (b)

     in any other case, £1,073,100;

• B is the aggregate of the lump sum and death benefit allowance enhancement factors that operate in relation to the relevant benefit crystallisation event.

(3)

The following provisions are “relevant protection provisions”—

(a)

paragraph 7 of this Schedule (primary protection);

(b)

paragraph 14 of Schedule 18 to FA 2011 (fixed protection);

(c)

paragraph 1 of Schedule 22 to FA 2013 (“fixed protection 2014”);

(d)

paragraph 1 of Schedule 6 to FA 2014 (“individual protection 2014”);

(e)

paragraph 1 of Schedule 4 to FA 2016 (“fixed protection 2016”);

(f)

paragraph 9 of that Schedule (“individual protection 2016”).

(4)

In the case of an individual in relation to whom a relevant protection provision applies, the individual’s “protected lump sum and death benefit allowance” is the amount treated as specified in section 637R of ITEPA 2003 in relation to the individual by virtue of the relevant protection provision.

(5)

The following paragraphs make provision for the operation of lump sum and death benefit enhancement factors—

• paragraphs 7 to 11A (primary protection);

• paragraph 18 (pre-commencement pension credits);

• paragraph 20A (pension credits from previously crystallised rights);

• paragraphs 20B to 20D (individuals who are not always relevant UK individuals);

• paragraphs 20E to 20G (transfers from recognised overseas pension schemes).

(6)

Paragraphs 7 and 18 also make provision enhancing the amount of an individual’s lump sum allowance.

(7)

In this paragraph “relevant benefit crystallisation event” has the same meaning as in section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance).”