Finance Act 2024

(637) (1) This Chapter makes provision about the income tax treatment of authorised lump sums and authorised lump sum death benefits. (2) In this Chapter— (a) “authorised lump sum” means a lump sum permitted by the lump sum rule in section 166 of FA 2004 to be paid by a registered pension scheme to a member of the scheme; (b) “authorised lump sum death benefit” means a lump sum death benefit permitted by the lump sum death benefit rule in section 168 of that Act to be paid by a registered pension scheme in respect of a member of the scheme. (3) Expressions used in this Chapter and Part 4 of FA 2004 (pensions etc) have the same meaning in this Chapter as in that Part. (637A) No liability to income tax arises on a pension commencement lump sum paid under a registered pension scheme. (637B) A person to whom a pension commencement excess lump sum is paid under a registered pension scheme is treated as having taxable pension income for the tax year in which the payment is made equal to the amount of the lump sum. (637C) (1) Subject to subsections (2) and (4), no liability to income tax arises on a serious ill-health lump sum paid under a registered pension scheme. (2) If— (a) a serious ill-health lump sum is paid under a registered pension scheme to a member who (at the time of the payment) is under 75, and (b) the lump sum exceeds the permitted maximum, section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme. (3) In subsection (2) “the permitted maximum”, in relation to a serious ill-health lump sum paid to a member, means so much of the member’s lump sum and death benefit allowance as is available immediately before the member becomes entitled to the lump sum (see section 637S). (4) If a serious ill-health lump sum is paid under a registered pension scheme to a member who (at the time of the payment) is 75 or over, section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme. (637D) (1) Subject to subsection (2), where an uncrystallised funds pension lump sum is paid under a registered pension scheme— (a) no liability to income tax arises on 25% of the lump sum, and (b) section 579A (pensions) applies in relation to the remainder of the lump sum as it applies to any pension under a registered pension scheme. (2) If— (a) an uncrystallised funds pension lump sum is paid under a registered pension scheme, and (b) 25% of the lump sum is an amount that exceeds the permitted maximum, section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme. (3) In subsection (2) “the permitted maximum”, in relation to an uncrystallised funds pension lump sum paid to a member, means the lower of the following amounts— (a) so much of the member’s lump sum allowance as is available immediately before the member becomes entitled to the lump sum (see section 637Q); (b) so much of the member’s lump sum and death benefit allowance as is available immediately before the member becomes entitled to the lump sum (see section 637S). (637E) A short service refund lump paid under a registered pension scheme is subject to income tax in accordance with section 205 of FA 2004 (charge to tax on scheme administrator in respect of such a lump sum) but not otherwise. (637F) No liability to income tax arises on a refund of excess contributions lump sum paid under a registered pension scheme. (637G) (1) Subject to subsection (2), a member of a registered pension scheme to whom— (a) a trivial commutation lump sum, or (b) a winding-up lump sum, is paid under the scheme is treated as having taxable pension income for the tax year in which the payment is made equal to the amount of the lump sum. (2) If, immediately before the lump sum is paid, the member has uncrystallised rights under any one or more arrangements under the pension scheme, the amount of the taxable pension income is reduced by the tax-free element (if any). (3) In subsection (2) “the tax-free element” means 25% of the value of any uncrystallised rights extinguished by the lump sum. (4) In this section “uncrystallised rights” has the same meaning as in section 212 of FA 2004; and the value for the purposes of this section of any uncrystallised rights is to be calculated in accordance with that section. (637H) (1) Subject to subsections (2) to (6), no liability to income tax arises on a defined benefits lump sum death benefit paid under a registered pension scheme. (2) If— (a) a defined benefits lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, (b) the lump sum is paid before the end of the relevant two year period, and (c) the lump sum exceeds the permitted maximum, section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme. (3) If— (a) a defined benefits lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, (b) the lump sum is not paid before the end of the relevant two year period, and (c) the lump sum is paid to a qualifying person, section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme. (4) If— (a) a defined benefits lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, (b) the lump sum is not paid before the end of the relevant two year period, and (c) the lump sum is paid to a non-qualifying person, the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise. (5) If a defined benefits lump sum death benefit under a registered pension scheme is paid— (a) in respect of a member who, on death, is 75 or over, and (b) to a qualifying person, section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme. (6) If a defined benefits lump sum death benefit under a registered pension scheme is paid— (a) in respect of a member who, on death, is 75 or over, and (b) to a non-qualifying person, the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise. (7) In this section— - “non-qualifying person” has the same meaning as in section 206 of FA 2004; - “the permitted maximum”, in relation to a defined benefits lump sum death benefit paid in respect of a member, means so much of the member’s lump sum and death benefit allowance as is available immediately before the lump sum is paid (see section 637S); - “qualifying person” means a person who is not a non-qualifying person; - “the relevant two year period” means the period of two years beginning with the day on which the scheme administrator of the scheme first knew of the member’s death or (if earlier) the day on which the scheme administrator could first reasonably have been expected to have known of it. (637I) (1) Subject to subsections (2), (3) and (4) no liability to income tax arises on a pension protection lump sum death benefit paid under a registered pension scheme. (2) If— (a) a pension protection lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, and (b) the lump sum exceeds the permitted maximum, section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme. (3) If a pension protection lump sum death benefit under a registered pension scheme is paid— (a) in respect of a member who, on death, is 75 or over, and (b) to a qualifying person, section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme. (4) If a pension protection lump sum death benefit under a registered pension scheme is paid— (a) in respect of a member who, on death, is 75 or over, and (b) to a non-qualifying person, the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise. (5) In this section— - “non-qualifying person” has the same meaning as in section 206 of FA 2004; - “the permitted maximum”, in relation to a pension protection lump sum death benefit paid in respect of a member, means so much of the member’s lump sum and death benefit allowance as is available immediately before the lump sum is paid (see section 637S); - “qualifying person” means a person who is not a non-qualifying person. (637J) (1) Subject to subsections (2) to (6), no liability to income tax arises on an uncrystallised funds lump sum death benefit paid under a registered pension scheme. (2) If— (a) an uncrystallised funds lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, (b) the lump sum is paid before the end of the relevant two year period, and (c) the lump sum exceeds the permitted maximum, section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme. (3) If— (a) an uncrystallised funds lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, (b) the lump sum is not paid before the end of the relevant two year period, and (c) the lump sum is paid to a qualifying person, section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme. (4) If— (a) an uncrystallised funds lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, (b) the lump sum is not paid before the end of the relevant two year period, and (c) the lump sum is paid to a non-qualifying person, the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise. (5) If an uncrystallised funds lump sum death benefit under a registered pension scheme is paid— (a) in respect of a member who, on death, is 75 or over, and (b) to a qualifying person, section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme. (6) If an uncrystallised funds lump sum death benefit under a registered pension scheme is paid— (a) in respect of a member who, on death, is 75 or over, and (b) to a non-qualifying person, the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise. (7) In this section— - “non-qualifying person” has the same meaning as in section 206 of FA 2004; - “the permitted maximum”, in relation to an uncrystallised funds lump sum death benefit paid in respect of a member, means so much of the member’s lump sum and death benefit allowance as is available immediately before the lump sum is paid (see section 637S); - “qualifying person” means a person who is not a non-qualifying person; - “the relevant two year period” means the period of two years beginning with the day on which the scheme administrator of the scheme first knew of the member’s death or (if earlier) the day on which the scheme administrator could first reasonably have been expected to have known of it. (637K) (1) Subject to subsections (2), (3) and (4), no liability to income tax arises on an annuity protection lump sum death benefit paid under a registered pension scheme. (2) If— (a) an annuity protection lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, and (b) the lump sum exceeds the permitted maximum, section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme. (3) If an annuity protection lump sum death benefit under a registered pension scheme is paid— (a) in respect of a member who, on death, is 75 or over, and (b) to a qualifying person, section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme. (4) If an annuity protection lump sum death benefit under a registered pension scheme is paid— (a) in respect of a member who, on death, is 75 or over, and (b) to a non-qualifying person, the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise. (5) In this section— - “non-qualifying person” has the same meaning as in section 206 of FA 2004; - “the permitted maximum”, in relation to an annuity protection lump sum death benefit paid in respect of a member, means so much of the member’s lump sum and death benefit allowance as is available immediately before the lump sum is paid (see section 637S); - “qualifying person” means a person who is not a non-qualifying person. (637L) (1) Subject to subsections (2) to (6), no liability to income tax arises on a drawdown pension lump sum death benefit paid under a registered pension scheme. (2) If— (a) a drawdown pension lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, (b) the lump sum is paid before the end of the relevant two year period, and (c) the lump sum exceeds the permitted maximum, section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme. (3) If— (a) a drawdown pension lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, (b) the lump sum is not paid before the end of the relevant two year period, and (c) the lump sum is paid to a qualifying person, section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme. (4) If— (a) a drawdown pension lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, (b) the lump sum is not paid before the end of the relevant two year period, and (c) the lump sum is paid to a non-qualifying person, the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise. (5) If a drawdown pension lump sum death benefit under a registered pension scheme is paid— (a) in respect of a member who, on death, is 75 or over, and (b) to a qualifying person, section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme. (6) If a drawdown pension lump sum death benefit under a registered pension scheme is paid— (a) in respect of a member who, on death, is 75 or over, and (b) to a non-qualifying person, the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise. (7) A reference in this section to a “member”, in relation to a drawdown pension lump sum death benefit under paragraph 17(2) of Schedule 29 to FA 2004 (lump sum payable on death of dependant of deceased member), is a reference to the dependant on whose death the lump sum is payable. (8) In this section— - “non-qualifying person” has the same meaning as in section 206 of FA 2004; - “the permitted maximum”, in relation to a drawdown pension lump sum death benefit paid in respect of a member, means so much of the member’s lump sum and death benefit allowance as is available immediately before the lump sum is paid (see section 637S); - “qualifying person” means a person who is not a non-qualifying person; - “the relevant two year period” means the period of two years beginning with the day on which the scheme administrator of the scheme first knew of the member’s death or (if earlier) the day on which the scheme administrator could first reasonably have been expected to have known of it. (637M) (1) Subject to subsections (2) to (6), no liability to income tax arises on a flexi-access drawdown lump sum death benefit paid under a registered pension scheme. (2) If— (a) a flexi-access drawdown lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, (b) the lump sum is paid before the end of the relevant two year period, and (c) the lump sum exceeds the permitted maximum, section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme. (3) If— (a) a flexi-access drawdown lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, (b) the lump sum is not paid before the end of the relevant two year period, and (c) the lump sum is paid to a qualifying person, section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme. (4) If— (a) a flexi-access drawdown lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, (b) the lump sum is not paid before the end of the relevant two year period, and (c) the lump sum is paid to a non-qualifying person, the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise. (5) If a flexi-access drawdown lump sum death benefit under a registered pension scheme is paid— (a) in respect of a member who, on death, is 75 or over, and (b) to a qualifying person, section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme. (6) If a flexi-access drawdown lump sum death benefit under a registered pension scheme is paid— (a) in respect of a member who, on death, is 75 or over, and (b) to a non-qualifying person, the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise. (7) A reference in this section to a “member”— (a) in relation to a flexi-access drawdown lump sum death benefit under paragraph 17A(2) of Schedule 29 to FA 2004 (lump sum payable on death of dependant of deceased member), is a reference to the dependant on whose death the lump sum is payable; (b) in relation to a flexi-access drawdown lump sum death benefit under paragraph 17A(3) or (4) of Schedule 29 to FA 2004 (lump sum payable on death of nominee or successor of deceased member), is a reference to the nominee or successor on whose death the lump sum is payable. (8) In this section— - “non-qualifying person” has the same meaning as in section 206 of FA 2004; - “the permitted maximum”, in relation to a flexi-access drawdown lump sum death benefit paid in respect of a member, means so much of the member’s lump sum and death benefit allowance as is available immediately before the lump sum is paid (see section 637S); - “qualifying person” means a person who is not a non-qualifying person; - “the relevant two year period” means the period of two years beginning with the day on which the scheme administrator of the scheme first knew of the member’s death or (if earlier) the day on which the scheme administrator could first reasonably have been expected to have known of it. (637N) A person to whom a trivial commutation lump sum death benefit is paid under a registered pension scheme is treated as having taxable pension income for the tax year in which the payment is made equal to the amount of the lump sum. (637P) An individual’s “lump sum allowance” is £268,275. (637Q) (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 is exempt from the charge to income tax by virtue of any provision of this Chapter. (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. (637R) An individual’s “lump sum and death benefit allowance” is £1,073,100. (637S) (1) This section is about the availability of an individual’s lump sum and death benefit 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— (i) the individual becoming entitled to a relevant lump sum, or (ii) a person being paid a relevant lump sum death benefit in respect of the individual; (b) “relevant lump sum” means— (i) a pension commencement lump sum, (ii) a serious ill-health lump sum, or (iii) an uncrystallised funds pension lump sum; (c) “relevant lump sum death benefit” means any authorised lump sum death benefit other than— (i) a charity lump sum death benefit, or (ii) a trivial commutation lump sum death benefit. (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 and death benefit allowance is available. (4) Otherwise, the amount of the individual’s lump sum and death benefit 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, or relevant lump sum death benefit, to which the event relates as is exempt from the charge to income tax by virtue of any provision of this Chapter. (7) Where more than one relevant benefit crystallisation event within subsection (2)(a)(i) 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. (8) Where more than one relevant benefit crystallisation event within subsection (2)(a)(ii) occurs in relation to an individual, they are to be treated for the purposes of this section as occurring— (a) immediately before the individual’s death, (b) immediately after any pension commencement lump sum to which the individual becomes entitled immediately before death by virtue of section 166(2) of FA 2004 (lump sum rule), and (c) in such order as may be decided by the individual’s personal representatives. (9) 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. (10) For transitional provision under which the amount of an individual’s lump sum and death benefit 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 126 of Schedule 9 to FA 2024. (11) For further transitional provision that may affect the operation of this section, see paragraph 20 of Schedule 36 to FA 2004 (pensions in payment before commencement of Part 4 of FA 2004).

Amendments of the Registered Pension Schemes (Authorised Payments) Regulations 2009

42

• (1) The Registered Pension Schemes (Authorised Payments) Regulations 2009 (S.I. 2009/1171) are amended as follows.

• (2) Omit regulation 3A (which relates to payments made before 6 April 2015 and is therefore no longer of practical utility).

• (3) In regulation 7 (meaning of “relevant accretion”) omit paragraphs (3) and (3A).

• (4) In regulation 16 (payments of arrears of pension after death) omit paragraphs (5) and (6).

• (5) In regulation 17 (pension commencement lump sums based on pension errors) omit paragraphs (4) and (5).

• (6) In regulation 18 (pension commencement lump sums paid in error: money purchase arrangements) omit paragraphs (4) and (5).

• (7) In regulation 19 (pension commencement lump sums paid after death) omit paragraphs (2) and (3).

• (8) In regulation 20 (part refund payments relating to short service), in paragraph (1) for sub-paragraph (b) substitute—

(b) the member has not previously become entitled to any pension or lump sum under the pension scheme;

.

Part 3 — Non-UK schemes

Amendments of Part 4 of FA 2004

43

Part 4 of FA 2004 (pension schemes etc) is amended as follows.

44

In section 244 (non-UK schemes: application of certain charges), after “under this Part” insert “, and under Part 9 of ITEPA 2003 (pension income),”.

45

For section 244A (overseas transfer charge) substitute—

(244AA) A charge to income tax, to be known as the overseas transfer charge, arises under the following sections— (a) section 244AC (overseas transfer charge: transfers where no exclusion applies); (b) section 244IA (overseas transfer charge: transfers exceeding available allowance). (244AB) (1) In this section and in sections 244AC to 244N— - “former QROPS” means a scheme that has at any time been a QROPS; - “onward transfer” means (subject to subsection (3)) a transfer of sums or assets held for the purposes of, or representing accrued rights under, an arrangement under a QROPS or a former QROPS in relation to a member so as to become held for the purposes of, or to represent rights under, an arrangement under another QROPS in relation to that person as a member of that other QROPS; - “original transfer”, in relation to an onward transfer, means (subject to subsection (3))— the recognised transfer or relieved relevant non-UK scheme transfer in respect of which the following conditions are met— it is from a registered pension scheme or a relieved relevant non-UK scheme to a QROPS, the sums and assets transferred by the onward transfer directly or indirectly derive from those transferred by it, and it is more recent than any other recognised transfer or relieved relevant non-UK scheme transfer in respect of which the conditions in sub-paragraphs (i) and (ii) are met, or where there is no such recognised transfer or relieved relevant non-UK scheme transfer, the relevant transfer (see paragraph 1(6) of Schedule 34) in respect of which the following conditions are met— it is from a relevant non-UK scheme (see paragraph 1(5) of Schedule 34), it is a transfer of the whole or part of the UK tax-relieved fund (see paragraph 3 of Schedule 34) of a member of the scheme, it is to a QROPS, and the sums and assets transferred by the onward transfer directly or indirectly derive from those transferred by it; - “QROPS” means a qualifying recognised overseas pension scheme; - “recognised transfer” has the meaning given by section 169; - “the relevant period” means— in the case of a recognised transfer or a relieved relevant non-UK scheme transfer made on 6 April in any year, the five years beginning with the date of that transfer, in the case of any other recognised transfer or relieved relevant non-UK scheme transfer, the period consisting of the combination of— the period beginning with the date of the transfer and ending immediately before the next 6 April, and the five years beginning at the end of that initial period, in the case of an onward transfer, the period— beginning with the date of the transfer, and ending at the end of the relevant period for the original transfer (see paragraphs (a) and (b) or, as the case may be, paragraphs (d) and (e)), in the case of a relevant transfer that— is made on 6 April in any year, and is the original transfer for an onward transfer, the five years beginning with the date of the relevant transfer, and in the case of a relevant transfer that— is made otherwise than on 6 April in any year, and is the original transfer for an onward transfer, the period consisting of the combination of: the period beginning with the date of the relevant transfer and ending immediately before the next 6 April; and the five years beginning at the end of that initial period; - “relieved relevant non-UK scheme” means a pension scheme that is a relevant non-UK scheme within the meaning of sub-paragraph (5) of paragraph 1 of Schedule 34 in respect of which at least one of paragraphs (a) to (c) of that sub-paragraph applies; - “relieved relevant non-UK scheme transfer” means a transfer, other than a block transfer, of sums or assets held for the purposes of, or representing accrued rights under, an arrangement under a relieved relevant non-UK scheme in relation to a relieved member of the scheme so as to become held for the purposes of, or to represent rights under, an arrangement under a QROPS in relation to that person as a member of that QROPS; - “ring-fenced transfer fund”, in relation to a QROPS or former QROPS, has the meaning given by paragraph 1 of Schedule 34. (2) For the purposes of the definition of “relieved relevant non-UK scheme transfer”— (a) a transfer is “a block transfer” in relation to a member of a pension scheme if it involves the transfer, in a single transaction, of all the sums and assets held for the purposes of, or representing accrued rights under, the arrangements under the scheme which relate to the member and at least one other member of the scheme; (b) an individual is “a relieved member” of a relieved relevant non-UK scheme if— (i) any of the contributions in respect of which relief has been given as mentioned in paragraph (a) or (b) of the definition of “relevant non-UK scheme” in paragraph 1(5) of Schedule 34 were contributions paid by or on behalf of, or in respect of, the individual, or (ii) the individual is the member, or one of the members, who has been exempt from liability to tax as mentioned in paragraph (c) of that definition. (3) Where, apart from this subsection, there would be different original transfers for different parts of an onward transfer, each such part of the onward transfer is to be treated as a separate onward transfer for the purposes of this section and sections 244AC to 244N. (244AC) (1) The overseas transfer charge arises where— (a) a transfer within subsection (2) is made to a QROPS, and (b) the transfer is not excluded from the charge by or under any of sections 244B to 244H. (2) A transfer to a QROPS is within this subsection if it is— (a) a recognised transfer, (b) a relieved relevant non-UK scheme transfer, or (c) an onward transfer that is made during the relevant period for the original transfer. (3) Sections 244B to 244H are subject to section 244I (circumstances in which exclusions do not apply).

46

• (1) Section 244B (exclusion: member and receiving scheme in same country) is amended as follows.

• (2) In subsection (1)—

• (a) in the words before paragraph (a)—

• (i) after “recognised transfer to a QROPS” insert “or a relieved relevant non-UK scheme transfer”;

• (ii) after “overseas transfer charge” insert “under section 244AC”;

• (b) in paragraph (a), after “the QROPS” insert “to which the transfer is made”;

• (c) in paragraph (b), in sub-paragraph (i), after “recognised transfer” insert “or relieved relevant non-UK scheme transfer”.

• (3) In subsection (3), in the words before paragraph (a), after “overseas transfer charge” insert “under section 244AC”.

47

• (1) Section 244C (exclusion: receiving scheme in EEA state or Gibraltar, and member resident in UK or EEA state) is amended as follows.

• (2) In subsection (2)—

• (a) in the words before paragraph (a)—

• (i) after “recognised transfer” insert “or a relieved relevant non-UK scheme transfer”;

• (ii) after “overseas transfer charge” insert “under section 244AC”.

• (b) in paragraph (b), in sub-paragraph (i), after “recognised transfer” insert “or relieved relevant non-UK scheme transfer”.

• (3) In subsection (3), in the words before paragraph (a), after “recognised transfer” insert “or relieved relevant non-UK scheme transfer”.

• (4) In subsection (4), in the words before paragraph (a), after “overseas transfer charge” insert “under section 244AC”.

48

In section 244D (exclusion: receiving scheme is an occupational pension scheme), in the words before paragraph (a), after “overseas transfer charge” insert “under section 244AC”.

49

In section 244E (exclusion: receiving scheme set up by international organisation), in subsection (1), in the words before paragraph (a), after “overseas transfer charge” insert “under section 244AC”.

50

In section 244F (exclusion: receiving scheme is an overseas public service scheme), in subsection (1), in the words before paragraph (a), after “overseas transfer charge” insert “under section 244AC”.

51

• (1) Section 244G (exclusions: avoidance of double charge, and transitional protections) is amended as follows.

• (2) In subsection (2), in the words before paragraph (a), after “overseas transfer charge” insert “under section 244AC”.

• (3) In subsection (3), after “overseas transfer charge” insert “under section 244AC”.

• (4) After subsection (4) insert—

(5) An onward transfer is excluded from the overseas transfer charge under section 244AC where— (a) the overseas transfer charge under section 244IA(1) arose in relation to the original transfer, and (b) none of the member’s overseas transfer allowance was available on the making of the original transfer.

52

In section 244H (power to provide for further exclusions)—

• (a) for “or an onward transfer,” substitute “a relieved relevant non-UK scheme transfer or an onward transfer”;

• (b) after “overseas transfer charge” insert “under section 244AC”.

53

In section 244I (circumstances in which exclusions do not apply), in subsection (1)—

• (a) for “or an onward transfer,” substitute “a relieved relevant non-UK scheme transfer or an onward transfer”;

• (b) after “overseas transfer charge” insert “under section 244AC”.

54

After section 244I insert—

(244IA) (1) The overseas transfer charge arises where— (a) a transfer to a QROPS is made that is— (i) within section 244AC(2)(a) or (b), or (ii) an onward transfer within section 244AC(2)(c) in relation to which the original transfer is a transfer within paragraph (b) of the definition of “original transfer” (see section 244AB(1)), (b) the transfer is excluded from the charge under section 244AC by or under any of sections 244B to 244H, and (c) the transferred value (determined in accordance with section 244K) exceeds the amount of the member’s overseas transfer allowance that is available on the making of the transfer. (2) The overseas transfer charge also arises where— (a) a transfer of the kind mentioned in subsection (1)(a) is made to a QROPS, (b) a charge under section 244AC (“the original charge”) arises in relation to the transfer, (c) a person liable to the original charge becomes entitled under section 244M to a repayment in respect of the original charge, and (d) the transferred value (determined in accordance with section 244K) exceeds the amount of the member’s overseas transfer allowance that is available on the making of the transfer. (244IB) A member’s “overseas transfer allowance” is an amount equal to the member’s lump sum and death benefit allowance. (244IC) (1) This section is about the availability of a member’s overseas transfer allowance on the making of a transfer of the kind mentioned in section 244IA(1)(a) (“the current overseas transfer”). (2) If no transfer of the kind mentioned in section 244IA(1)(a) has been made in relation to the member before the current overseas transfer, the whole of the member’s overseas transfer allowance is available. (3) Otherwise, the amount of the member’s overseas transfer 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. (4) For this purpose “the previously-used amount” is the aggregate of the transferred value (determined in accordance with section 244K) of each transfer (if any) of the kind mentioned in section 244IA(1)(a) that has been made in relation to the member before the current overseas transfer. (5) A reference in this section to a transfer of the kind mentioned in section 244IA(1)(a) is to a transfer made on or after 6 April 2024.

55

• (1) Section 244J (persons liable to charge) is amended as follows.

• (2) After subsection (1) insert—

(1A) In the case of a relieved relevant non-UK scheme transfer, the member is liable to the overseas transfer charge.

• (3) In subsection (4), in the words before paragraph (a), for “transfer” substitute “recognised transfer to a QROPS or an onward transfer”.

56

After section 244J insert—

(244JA) (1) Where the overseas transfer charge arises under section 244AC in relation to a transfer, the charge is— (a) in a case where the transfer is an onward transfer and the overseas transfer charge under section 244IA(1) arose in relation to the original transfer, 25% of so much of the transferred value of the original transfer as did not exceed the amount of the member’s overseas transfer allowance that was available on the making of the original transfer; (b) in any other case, 25% of the transferred value. (2) Where the overseas transfer charge arises under section 244IA in relation to a transfer, the charge is 25% of so much of the transferred value as exceeds the amount of the member’s overseas transfer allowance that is available on the making of the transfer.

57

• (1) Section 244K (amount of charge) is amended as follows.

• (2) For the heading substitute “Meaning of “transferred value””.

• (3) For subsection (1) substitute—

(1A) The transferred value, in relation to a transfer within section 244AC(2), is to be determined in accordance with this section.

• (4) In subsection (2), in the words after paragraph (b), for “(5)” substitute “(6)”.

• (5) In subsection (3), in the words after paragraph (b), for “(5)” substitute “(6)”.

• (6) After subsection (3) insert—

(3A) If the transfer is a transfer from a relieved relevant non-UK scheme, the transferred value is the total of— (a) the amount of any sums transferred that are attributable to the member’s UK tax-relieved fund (see paragraph 3 of Schedule 34), and (b) the value of any assets transferred that are attributable to that fund, but this is subject to subsections (6) to (9).

• (7) In subsection (4), in the words after paragraph (b), for “(5)” substitute “(6)”.

• (8) Omit subsections (5) and (10).

58

In section 244M (repayments of charge on subsequent excluding events), in subsection (1), in paragraph (a), for “overseas transfer charge” substitute “the overseas transfer charge under section 244AC”.

59

• (1) Schedule 33 (overseas pension schemes: migrant member relief) is amended as follows.

• (2) In paragraph 4 (meaning of “relevant migrant member”)—

• (a) in sub-paragraph (1)(d), after “events that are” insert “relevant”;

• (b) after sub-paragraph (3) insert—

(4) 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).

• (3) In paragraph 5 (meaning of “qualifying” overseas pension scheme)—

• (a) in sub-paragraph (2), for “events that are benefit crystallisation” substitute “relevant”;

• (b) for sub-paragraph (2A) substitute—

(2A) In sub-paragraph (2) “relevant events” means— (a) relevant benefit crystallisation events, or (b) occasions that are, or could (depending on their timing) be, occasions on which an individual first flexibly accesses pension rights for the purposes of sections 227B to 227F.

;

• (c) after sub-paragraph (5) insert—

(6) 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).

60

• (1) Schedule 34 (non-UK schemes: application of certain charges) is amended as follows.

• (2) In paragraph 1 (member payment charges)—

• (a) in sub-paragraph (3), at the end of paragraph (d) insert “and”;

• (b) in sub-paragraph (3), for paragraphs (da), (db) and (e) substitute—

(e) the charge to tax under Part 9 of ITEPA 2003 (pension income) on pension income to which— (i) any provision of Chapter 15A of that Part of that Act (lump sums under registered pension schemes) applies, or (ii) section 579A of that Act (pension income under registered pension schemes) applies by virtue of any provision of that Chapter.

;

• (c) in sub-paragraph (4), for paragraph (b) substitute—

(b) Chapter 15A of Part 9 of ITEPA 2003 (lump sums under registered pension schemes).

• (3) After paragraph 5 insert—

(5ZA) (1) The provisions of Chapter 15A of Part 9 of ITEPA 2003 (lump sums under registered pension schemes) do not apply in relation to— (a) a serious ill-health lump sum paid to a transfer member of a relevant non-UK scheme, or (b) an authorised lump sum death benefit paid in respect of a transfer member of a relevant non-UK scheme who (at the time of the payment) is under 75. (2) In this paragraph “authorised lump sum death benefit” means a lump sum death benefit permitted by the lump sum death benefit rule in section 168 of this Act to be paid in respect of a member of a registered pension scheme.

• (4) Omit paragraphs 13 to 19 (lifetime allowance charge).

Amendments of Chapter 4 of Part 9 of ITEPA 2003

61

• (1) In Chapter 4 of Part 9 of ITEPA 2003 (foreign pensions), section 574A (“pension”: relevant lump sums) is amended as follows.

• (2) After subsection (2) insert—

(2A) A lump sum is not “a relevant lump sum” by virtue of subsection (2) if it is within paragraph 5ZA(1)(a) or (b) of Schedule 34 to FA 2004 (which specify certain lump sums paid to or in respect of transfer members of relevant non-UK schemes).

• (3) In subsection (3), in Step 3—

• (a) in paragraph (a) for “section 636B(3)” substitute “section 637G(2)”;

• (b) in paragraph (b), for “all or part of the member’s lifetime allowance is available” substitute “all of the member’s lump sum allowance is available”.

Amendments of the Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006

62

• (1) The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (S.I. 2006/207) are amended as follows.

• (2) In regulation 1(2) (interpretation) omit the definition of “benefit crystallisation event 8”.

• (3) In regulation 3 (computation of a member’s relevant transfer fund)—

• (a) the existing text becomes paragraph (1);

• (b) in sub-paragraph (a) of that paragraph—

• (i) omit “by virtue of benefit crystallisation event 8”;

• (ii) after “registered” insert “pension”;

• (c) after that paragraph insert—

(2) For the purposes of this regulation, the “amount crystallised” on a transfer from a UK registered scheme to a relevant non-UK scheme is the aggregate of the amount of any sums transferred and the market value of any assets transferred.

• (4) In regulation 3A (computation of a member’s taxable asset transfer fund)—

• (a) in paragraph (1)(a) omit “by virtue of benefit crystallisation event 8”;

• (b) after paragraph (2) insert—

(3) For the purposes of this regulation, the “amount crystallised” on a transfer from a UK registered pension scheme to a relevant non-UK scheme is the aggregate of the amount of any sums transferred and the market value of any assets transferred.

• (5) In regulation 4ZB (payment and crystallisation valuation), in paragraph (9), for “paragraph 3(7C) of Schedule 29” substitute “section 278B”.

• (6) In regulation 15 (modification of Schedule 29 (authorised lump sums: definitions etc))—

• (a) after paragraph (1) insert—

(1A) In paragraph 3C (pension commencement excess lump sum)— (a) in sub-paragraph (1), after paragraph (c) insert— (ca) it is not paid from the relevant transfer fund of a qualifying recognised overseas pension scheme; (cb) it is not paid from the UK tax-relieved fund of a relevant non-UK scheme. (b) after sub-paragraph (4) insert— (5) Expressions used in sub-paragraph (1)(ca) and (cb) have the same meaning as in Schedule 34 (non-UK schemes: application of certain charges). (1B) In paragraph 4 (serious ill-health lump sum)— (a) in sub-paragraph (1)(a)— (i) for “scheme administrator” substitute “scheme manager”; (ii) after “registered medical practitioner” insert “or a recognised medical practitioner”; (b) at the end insert— (4) In sub-paragraph (1) “recognised medical practitioner” means a medical practitioner practising outside the United Kingdom who is authorised, licensed or registered to practise medicine in the country or territory, outside the United Kingdom, in which either the scheme or the member is resident. (1C) In paragraph 12A (references to availability of allowances) after sub-paragraph (4) insert— (5) Sub-paragraph (6) applies in any case in which it is necessary to determine, for the purposes of— (a) paragraph 1 (pension commencement lump sum), (b) paragraph 7 (trivial commutation lump sum), or (c) paragraph 10 (winding-up lump sum), whether all or part of a transfer member’s lump sum allowance or lump sum and death benefit allowance is available when a lump sum is paid by a recognised overseas pension scheme. (6) Sections 637Q and 637S of ITEPA 2003 (availability of allowances) have effect as if references in those sections to relevant benefit crystallisation events were only to relevant benefit crystallisation events— (a) occurring in relation to the recognised overseas pension scheme, and (b) in respect of lump sums referable to the member’s relevant transfer fund (within the meaning given by paragraph 4 of Schedule 34 to FA 2004). (7) In sub-paragraph (5) “transfer member” has the meaning given by paragraph 1(8) of Schedule 34 (non-UK schemes).

;

• (b) omit paragraphs (2) to (10).

• (7) In regulation 17 (modification of Schedule 34 (non-UK schemes: application of certain charges)), in the inserted paragraph 19A (Revenue and Customs discretion)—

• (a) in sub-paragraph (1)—

• (i) at the end of paragraph (a)(ii) insert “and”;

• (ii) omit paragraph (c) and the “and” before it;

• (b) in sub-paragraph (3)(b), for “to (c)” substitute “and (b)”;

• (c) in sub-paragraph (4)(b), for “by” the first time it occurs substitute “be”.

• (8) For regulation 18 (modification of section 636A(1B) (taxation of uncrystallised funds pension lump sum paid to member who is 75 or over)) substitute—

(18) (1) Paragraph (2) applies where an uncrystallised funds pension lump sum is paid to a transfer member of a recognised overseas pension scheme. (2) In determining the amount of “the permitted maximum” for the purposes of section 637D of ITEPA 2003 (income tax treatment of uncrystallised funds pension lump sums), sections 637Q and 637S of that Act (availability of allowances) have effect as if references to relevant benefit crystallisation events were only to relevant benefit crystallisation events— (a) occurring in relation to the recognised overseas pension scheme, and (b) in respect of lump sums referable to the member’s relevant transfer fund (within the meaning given by paragraph 4 of Schedule 34 to FA 2004). (3) In sub-paragraph (1) “transfer member” has the meaning given by paragraph 1(8) of Schedule 34 to FA 2004 (non-UK schemes).

Part 4 — Transitional protections

Amendments of Schedule 29 to FA 2004

63

• (1) In Schedule 29 to FA 2004 (registered pension schemes: authorised lump sums: supplementary), paragraph 4A (uncrystallised funds pension lump sum) is amended as follows.

• (2) In sub-paragraph (1)—

• (a) at the end of paragraph (e) insert “and”;

• (b) omit the “and” at the end of paragraph (f);

• (c) omit paragraph (g).

• (3) Omit sub-paragraphs (3) to (6).

• (4) At the end insert—

(8) For further provision about circumstances in which a lump sum is not an uncrystallised funds pension lump sum, see the following provisions of Part 2 of Schedule 36 (transitional provision and saving: pre-commencement rights: enhancement of allowances)— (a) paragraph 7(8) (enhancement of allowances: primary protection); (b) paragraph 12(3H) (enhancement of allowances: enhanced protection); (c) paragraph 18(7) (enhancement of allowances: pre-commencement pension credits); (d) paragraph 20A(8) (pension credits from previously crystallised rights); (e) paragraph 20B(8) (individuals who are not always relevant UK individuals); (f) paragraph 20E(9) (transfers from recognised overseas pension schemes).

Amendments of Schedule 34 to FA 2004

64

• (1) Schedule 34 to FA 2004 (non-UK schemes: application of certain charges) is amended as follows.

• (2) In the heading, at the end insert “and protections etc”.

• (3) After paragraph 12 (application of annual allowance provisions) insert—

(12A) (1) The provisions of Schedule 36 relating to the enhancement of an individual’s lump sum allowance and lump sum and death benefit allowance (“the enhancement of allowances provisions”) apply in relation to an individual who is a relieved member of a relieved non-UK pension scheme as if the relieved non-UK pension scheme were a registered pension scheme. (2) A pension scheme is a relieved non-UK pension scheme if— (a) relief from tax has been given in respect of contributions paid under the pension scheme by virtue of Schedule 33 (overseas pension schemes: migrant member relief), (b) relief from tax has been so given at any time after 5th April 2006 under double tax arrangements, or (c) a member of the pension scheme has been, or members of the pension scheme have been, exempt from liability to tax by virtue of section 307 of ITEPA 2003 (exemption for provision made by employer for retirement or death benefit) in respect of provision made under the pension scheme at any time after 5th April 2006 when the pension scheme was an overseas pension scheme. (3) An individual is a relieved member of a relieved non-UK pension scheme if— (a) any of the contributions in respect of which relief has been given as mentioned in sub-paragraph (2)(a) or (b) were contributions paid by or on behalf of, or in respect of, the individual, or (b) the individual is the member, or one of the members, who has been exempt from liability to tax as mentioned in sub-paragraph (2)(c).

Amendments of Part 2 of Schedule 36 to FA 2004

65

Part 2 of Schedule 36 to FA 2004 (transitional provision and saving: pre-commencement rights: lifetime allowance charge) is amended as follows.

66

In the heading, for “lifetime allowance charge” substitute “enhancement of allowances etc”.

67

Before paragraph 7 and the italic heading before it insert—

(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 + A × B$ where— A is— 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)); 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).

68

For paragraph 7 (primary protection) substitute—

(7) (1) This paragraph applies in the case of an individual where— (a) the amount of the relevant pre-commencement pension rights of the individual exceeds £1,500,000, and (b) notice of intention to rely on this paragraph is given to His Majesty’s Revenue and Customs in accordance with regulations made by the Commissioners for His Majesty’s Revenue and Customs. (2) Chapter 15A of Part 9 of ITEPA 2003 (pension income: lump sums under registered pension schemes) has effect— (a) in relation to a relevant benefit crystallisation event within the meaning of section 637Q of ITEPA 2003 (availability of individual’s lump sum allowance) occurring in relation to the individual, as if the amount specified in section 637P of ITEPA 2003 (individual’s lump sum allowance) were £375,000; (b) in relation to a relevant benefit crystallisation event within the meaning of section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance) occurring in relation to the individual, as if the amount specified in section 637R of ITEPA 2003 (individual’s lump sum and death benefit allowance) were £1,800,000. (3) A lump sum and death benefit allowance enhancement factor operates in relation to the relevant benefit crystallisation event mentioned in paragraph 6A(1). (4) The lump sum and death benefit allowance enhancement factor is the primary protection factor. (5) The primary protection factor is— $$R R - £ 1 , 500 , 000 £ 1 , 500 , 000$ where RR is the amount of the relevant pre-commencement pension rights of the individual (see sub-paragraph (6)).$ (6) The amount of the relevant pre-commencement rights of the individual is the aggregate of— (a) the value of the individual’s relevant uncrystallised pension rights on 5th April 2006 (calculated in accordance with paragraphs 8 and 9), and (b) the value of the individual’s relevant crystallised pension rights on that date (calculated in accordance with paragraph 10). (7) Sub-paragraph (5) is subject to paragraph 11 (pension debit on or after 6th April 2006) and paragraph 11A (pension debit on or after 6th April 2006: lump sum death benefits). (8) Where this paragraph applies in the case of an individual, for the purposes of this Part a lump sum is not an uncrystallised funds pension lump sum (see paragraph 4A of Schedule 29) if— (a) the lump sum condition (see paragraphs 24(2) and (3), 25 and 26 of this Schedule) is met in relation to the individual, or (b) immediately before the lump sum is paid, the amount given by the formula in sub-paragraph (9) is less than 25% of the lump sum. (9) The formula is— $$£ 1 , 800 , 000 - A 4$ where A is the amount that would be the previously-used amount within the meaning of section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance) if a relevant benefit crystallisation event within the meaning of that section had occurred immediately before the lump sum is paid.$

69

• (1) Paragraph 11 (primary protection: pension debit on or after 6th April 2006) is amended as follows.

• (2) In sub-paragraph (1)(a), for “makes provision for the operation of a lifetime allowance enhancement factor” substitute “applies”.

• (3) In sub-paragraphs (2) and (3), for “paragraph 7(3)” substitute “paragraph 7(5)”.

• (4) In sub-paragraph (4), for “benefit crystallisation event” substitute “relevant benefit crystallisation event”.

• (5) After that sub-paragraph insert—

(5) 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).

70

• (1) Paragraph 11A (primary protection: pension debit on or after 6th April 2006: lump sum death benefits) is amended as follows.

• (2) In sub-paragraph (1)(a), for “makes provision for the operation of a lifetime allowance enhancement factor” substitute “applies”.

• (3) In paragraphs (a) and (b) of sub-paragraph (4), for “benefit crystallisation event” substitute “relevant benefit crystallisation event”.

• (4) After that sub-paragraph insert—

(5) 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).

71

• (1) Paragraph 12 (enhanced protection) is amended as follows.

• (2) For sub-paragraph (3) substitute—