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Section 637Q Availability of individual’s lump sum allowanceC11F1C1C2C3C4C5C6C7C8C9C10

United Kingdom

(1)

This section is about the availability of an individual’s lump sum allowance on the occurrence of a relevant benefit crystallisation event (“the current event”).

(2)

In this section—

(a)

“relevant benefit crystallisation event”, in relation to an individual, means the individual becoming entitled to a relevant lump sum;

(b)

“relevant lump sum” means—

(i)

a pension commencement lump sum, or

(ii)

an uncrystallised funds pension lump sum.

(3)

If no relevant benefit crystallisation event has occurred in relation to the individual before the current event, the whole of the individual’s lump sum allowance is available.

(4)

Otherwise, the amount of the individual’s lump sum allowance that is available is—

(a)

so much of that allowance as is left after deducting the previously-used amount, or

(b)

if none is left after deducting that amount, nil.

(5)

For this purpose “the previously-used amount” is the aggregate of the non-taxable amounts in relation to each relevant benefit crystallisation event that has occurred in relation to the individual before the current event.

(6)

In subsection (5) “non-taxable amount”, in relation to a relevant benefit crystallisation event, means so much (if any) of the relevant lump sum to which the event relates as F2is not, by virtue of any provision of this Chapter, taxable pension income.

(F36A)

Where more than one relevant benefit crystallisation event occurs in relation to an individual on the same day, it is for the individual to decide the order in which they are to be treated as occurring for the purposes of this section.

(7)

A reference in this section to a relevant benefit crystallisation event is to a relevant benefit crystallisation event occurring on or after 6 April 2024.

(8)

For transitional provision under which the amount of an individual’s lump sum allowance available on the occurrence of a relevant benefit crystallisation event may be reduced as a result of events occurring before 6 April 2024, see paragraph 125 of Schedule 9 to FA 2024.

Annotations

Textual amendments

F1

Pt. 9 Ch. 15A substituted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 41, 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17)

F2

Words in s. 637Q(6) substituted (for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(5)

F3

S. 637Q(6A) inserted (for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 (S.I. 2026/698), regs. 1(2)(6), 2(3)

Modifications

C1

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 20B (as amended by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 8(10))

C2

Pt. 9 Ch. 15A applied (with modifications) (for the tax year 2024-25 and subsequent tax years) by S.I. 2010/1187, regs. 5-11 (as amended by S.I. 2024/1012, regs. 1(2)(3), 27(9)(b); and (for the tax year 2024-25 and subsequent tax years) by S.I. 2026/698, regs. 1(2)(6), 15(3))

C3

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by S.I. 2006/572, art. 7 (as substituted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(3))

C4

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by S.I. 2010/1187, reg. 4 (as substituted by S.I. 2024/1012, regs. 1(2)(3), 27(3); and as amended (for the tax year 2024-25 and subsequent tax years) by S.I. 2026/698, regs. 1(2)(6), 15(2))

C5

Pt. 9 Ch. 15A applied (with modifications) (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 34A (as inserted by S.I. 2024/1167, regs. 1(2)(3), 3(9) (with reg. 6); and as amended (for the tax year 2024-25 and subsequent tax years) by S.I. 2026/698, regs. 1(2)(6), 5(12))

C6

Pt. 9 modified (for the tax year 2024-25 and subsequent tax years) by S.I. 2009/1171, reg. 5ZA (as inserted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 5(3) (with reg. 6))

C7

Pt. 9 Ch. 15A applied (with modifications) (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 paras. 12, 12A (as amended by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 8(4)(5))

C8

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by S.I. 2006/575, reg. 42B (as substituted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 26(6))

C9

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 20A (as amended by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 8(9))

C10

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 20E (as amended by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 8(13))

C11

S. 637Q applied (with modifications) (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 20(1A) (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 77(3), 124 (with Sch. 9 paras. 125-132)) (as amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 8(8)(b), 17)

Notes on Part 9

Modifications

C1

Pt. 9: power to amend conferred (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), s. 4(3)

C2

Pt. 9 excluded by 2004 c. 12, Sch. 36 para. 45A(1) (as inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 4 para. 19)

C3

Pt. 9 modified (6.4.2023) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023 (S.I. 2023/113), regs. 1(2), 23(2), 24(2), 26(2), 28(2) (with reg. 1(3))

C4

Pt. 9 modified (14.9.2023) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) (No. 2) Regulations 2023 (S.I. 2023/912), regs. 1(2), 9(2), 11(2), 16(2) (with reg. 1(3))

C5

Pt. 9 modified (31.10.2023) by The Registered Pension Schemes (Authorised Member Payments) Regulations 2023 (S.I. 2023/1012), regs. 1, 4

C7

Pt. 9 modified (13.2.2025 with effect in relation to the tax year 2024-25 and subsequent tax years) by The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52), regs. 1(2)(3), 4, 6, 7

C8

Pt. 9 modified (14.7.2026 for the tax year 2014-15 and subsequent tax years) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2026 (S.I. 2026/673), regs. 1(2)(5), 12

Notes on Chapter 15A

Modifications

C1

Pt. 9 modified (6.4.2023) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023 (S.I. 2023/113), regs. 1(2), 23(2), 24(2), 26(2), 28(2) (with reg. 1(3))

C2

Pt. 9 Ch. 15A modified (with effect in accordance with reg. 1(3) of the amending S.I.) by S.I. 2006/569, reg. 5(1) (as substituted by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 10(2)(a))

C3

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2014 c. 26, Sch. 6 para. 1(2) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 92(3), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 15, 17))

C4

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2016 c. 24, Sch. 4 para. 1(2) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 93(3)(a), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 16(2), 17))

C5

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 6A (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 67, 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17)

C6

Pt. 9 Ch. 15A applied (with modifications) (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 19(1A)(1B) (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 76(3), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 8(7), 17)

C7

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2016 c. 24, Sch. 4 para. 9(2) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 93(4)(b), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 16(3), 17))

C8

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2013 c. 29, Sch. 22 para. 1(2) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 91(3), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 14, 17))

C9

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 7 (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 68, 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 8(3), 17))

C10

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2011 c. 11, Sch. 18 para. 14(3) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 90(4), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 13, 17))

C11

Pt. 9 Ch. 15A excluded (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 34 para. 5ZA (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 60(3), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17)

C12

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by S.I. 2006/572, arts. 25CA-25CC (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 95(5), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17, 25(16)(17)) and S.I. 2024/1167, regs. 1(2)(3), 4(9)(10))

C13

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 18 (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 75, 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 8(6), 17))

C14

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 29A (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 85, 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17)

C15

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by S.I. 2006/207, reg. 18 (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 62(8), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4); and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17))

C16

Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 12(3A)-(3H) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 71(2), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17))

C27

Pt. 9 modified (13.2.2025 with effect in relation to the tax year 2024-25 and subsequent tax years) by The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52), regs. 1(2)(3), 4, 6, 7