# The Registered Pension Schemes (Surrender of Relevant Excess) Regulations 2006, Note: Explanatory note


(This note is not part of the Regulations)
Part 4 of the Finance Act 2004 (c. 12) makes provision for the taxation of pension schemes; and Schedule 36 to that Act, which falls within that Part, contains transitional provisions. Under paragraph 12 of Schedule 36 there is no liability to the lifetime allowance charge to income tax if an individual has one or more relevant existing arrangements (as defined by sub-paragraph (4) of paragraph 12). Sub-paragraph (5) of paragraph 12 then provides that notice of intention to rely on that paragraph may not be given in a case where the value (or the aggregate value) of the uncrystallised rights of the individual on 5th April 2006 is arrived at in accordance with paragraph 9 of Schedule 36 unless such rights as, in accordance with regulations, are to be treated as representing the relevant excess have been surrendered. Sub-paragraph (6) of paragraph 12 then defines the expression “the relevant excess”.
These Regulations specify the rights that are to be treated as representing the relevant excess. Regulation 1 provides for citation, commencement and interpretation. Regulation 2 then provides that the rights that are to be treated as representing the relevant excess are those that meet the qualification condition (as set out in regulation 3) and are valued in accordance with the computation condition (as set out in regulation 4). Regulations 3 and 4 then deal in more detail with the qualification condition and the computation condition. Regulation 5 provides that a surrender of rights that are to be treated as representing the relevant excess is not to be treated as an unauthorised payment under section 172A of the 2004 Act (and, accordingly, as a payment chargeable to income tax), except to the extent that the value of the rights surrendered is greater than the relevant excess; and regulation 6 provides that the rules of any existing pension scheme to which paragraph 1(1) of Schedule 36 (deemed registration of existing pension schemes) applies shall be modified so as to provide that a member may surrender rights that are to be treated as representing the relevant excess to the extent that the value of the rights surrendered does not exceed the relevant excess.

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Source: https://www.legislation.gov.uk/uksi/2006/211/note (the official version)
Page: https://openlegislation.uk/registered-pension-schemes-surrender-of-relevant-excess-regulations-2006/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.