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Article 25D Stand-alone lump sums: further provisionsF1C1

United Kingdom

(1)

Paragraphs (2) and (3) apply if—

(a)

a stand-alone lump sum is paid to a member of a pension scheme in circumstances where article 25B(2) (circumstance A) applies, or

(b)

a stand-alone lump sum is paid to a member of a pension scheme, and a pension commencement lump sum is subsequently paid to the member (whether from the same pension scheme or from any other pension scheme) in circumstances where paragraph 28 of Schedule 36 applies to the payment of the pension commencement lump sum.

(2)

The stand-alone lump sum paid must not exceed the stand-alone lump sum maximum.

F2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(F33)

In paragraph (2) “the stand-alone lump sum maximum” means—

A-B

where—

  • “A” has the same meaning as in the modified paragraph 2 of Schedule 29 contained in paragraph 28(3) of Schedule 36;

  • “B” has the same meaning as in that modified paragraph 2, but reading references in it to a pension commencement lump sum as including a stand-alone lump sum.

(4)

Paragraph (5) applies if—

(a)

an individual was a member of a pension scheme (“the original pension scheme”),

(b)

the original pension scheme was entitled to pay a stand-alone lump sum to the member which, if it had been paid, would have been a stand-alone lump sum paid in circumstances where article 25B(4) (circumstance C) applied,

(c)

the rights of the member under the original pension scheme are transferred to a new pension scheme (the “transferee pension scheme”) as the result of a block transfer (within the meaning given by paragraph 22(6) of Schedule 36), and

(d)

the member had no rights under the transferee pension scheme before the block transfer.

(5)

The transferee pension scheme is treated as the same pension scheme as the original pension scheme (so that, accordingly, the transferee pension scheme may pay a stand-alone lump sum to the member in circumstances where article 25B(4) (circumstance C) applies).

(6)

Paragraphs (7) to (9) apply if—

(a)

an individual is a member of a pension scheme (a “stand-alone lump sum pension scheme”) which is entitled to pay a stand-alone lump sum to the member in circumstances where article 25B(3) or (4) (circumstance B or C) applies;

(b)

on or after 6th April 2006 sums and assets are transferred in relation to the member by another pension scheme under which the member has rights (a “transferor scheme”) to the stand-alone lump sum pension scheme; and

(c)

the stand-alone lump sum pension scheme subsequently makes a lump sum payment to the member.

(7)

The lump sum payment made by the stand-alone lump sum pension scheme to the member is not a stand-alone lump sum unless the lump sum is also made in the circumstances set out in paragraph (8).

(8)

The circumstances are that—

(a)

neither a stand-alone lump sum nor a pension commencement lump sum has previously been paid under the pension scheme to the member, and

(b)

the sums and assets transferred (or, if there is more than one transfer, all the sums and assets transferred), as specified in paragraph (6)(b), are stand-alone lump sum transfer sums.

(9)

In paragraph (8)(b) “stand-alone lump sum transfer sums” means sums and assets transferred by the transferor scheme to the stand-alone lump sum pension scheme in the circumstances specified in paragraph (6)(b) which would have been a stand-alone lump sum on the assumptions that—

(a)

the sums and assets had been transferred not to the stand-alone lump sum pension scheme but to the member, and

(b)

the condition in article 25A(4) (condition C) is met.

Annotations

Textual amendments

F1

Arts. 25-25D substituted for art. 25 (25.7.2006) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment No. 2) Order 2006 (S.I. 2006/2004), arts. 1(1), 3

F2

Words in art. 25D(2) omitted (25.6.2026 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 (S.I. 2026/698), regs. 1(2)(6), 14(8)(a)

F3

Art. 25D(3) substituted (25.6.2026 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), 14(8)(b)

Modifications

C1

Art. 25D modified (1.5.2010) by The Financial Assistance Scheme (Tax) Regulations 2010 (S.I. 2010/1187), regs. 1(1), 19(b)