The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024

Schedule 9 to FA 2024

4.—(1) Schedule 9 to FA 2024 (pensions) is amended as follows.

(2) Paragraph 125 (transitional provision: availability of individual’s lump sum allowance) is amended in accordance with paragraphs (3) to (7).

(3) In sub-paragraph (1) —

(a)in paragraph (a) omit the “and” at the end;

(b)at the end of paragraph (b) insert “, and

“(c)at the time the relevant benefit crystallisation occurs, the individual—

(i)is not an individual to whom paragraph 12 of Schedule 36 to FA 2004 applies (enhanced protection), or

(ii)is such an individual and is not within paragraph 24(1) of Schedule 36 to FA 2004 (persons with lump sum protection).”.

(4) Omit sub-paragraph (2).

(5) In sub-paragraph (3) for “Otherwise, the” substitute “The”.

(6) After sub-paragraph (3) insert—

“(3A) Where—

(a)the individual is an individual to whom paragraph 7 of Schedule 36 to FA 2004 applies (primary protection),

(b)the individual is not within paragraph 24(1) of Schedule 36 to FA 2004 (persons with lump sum protection), and

(c)25% of the individual’s lifetime allowance previously-used amount is greater than £375,000,

sub-paragraph (3) has effect as if the amount determined under paragraph (b) of that sub-paragraph were £375,000.”.

(7) In sub-paragraph (4), for “sub-paragraphs (2) and (3) do” substitute “sub-paragraph (3) does”.

(8) Paragraph 126 (transitional provision: availability of individual’s lump sum and death benefit allowance) is amended in accordance with paragraphs (9) to (11).

(9) In sub-paragraph (1)—

(a)in paragraph (a) omit the “and” at the end;

(b)at the end of paragraph (b) insert “, and”;

(c)after that paragraph insert—

“(c)at the time the relevant benefit crystallisation occurs, the individual is not an individual to whom paragraph 12 of Schedule 36 to FA 2004 applies (enhanced protection).” (1).

(10) After sub-paragraph (3) insert—

“(3A) Where—

(a)the individual is an individual to whom paragraph 7 of Schedule 36 to FA 2004 applies (primary protection),

(b)the individual is not within paragraph 24(1) of Schedule 36 to FA 2004 (persons with lump sum protection),

(c)the appropriate percentage is 25%, and

(d)25% of the individual’s lifetime allowance previously-used amount is greater than £375,000,

sub-paragraph (3) has effect as if the amount determined under paragraph (b) of that sub-paragraph were £375,000.”.

(11) In sub-paragraph (4), for “sub-paragraph (3)” substitute “sub-paragraphs (3) and (3A)”.

(12) After paragraph 127 (transitional tax-free amount certificates) insert—

“Availability of member’s overseas transfer allowance

127A.—(1) This paragraph applies where—

(a)one or more benefit crystallisation events within the meaning of Part 4 of FA 2004 occurred in relation to an individual before 6 April 2024, and

(b)a transfer of the kind mentioned in section 244IA(1)(a) of FA 2004 is made in relation to the individual on or after that date.

(2) Where the individual’s lifetime allowance previously-used amount is equal to or greater than the individual’s lifetime allowance, none of the individual’s overseas transfer allowance is available on the making of the transfer.

(3) Otherwise, the amount of the individual’s overseas transfer allowance that is available on the making of the transfer is—

(a)the amount of that allowance that is available in accordance with section 244IC of FA 2004 on the making of the transfer, less

(b)the individual’s lifetime allowance previously-used amount,

or, if that produces a negative result, nil.”.

(13) In paragraph 128 (provision of information by scheme administrators to members), in sub-paragraph (6)(a), before sub-paragraph (i) insert—

“(zi)the amount of the member’s lifetime allowance previously-used amount is equal to or greater than the member’s lifetime allowance,”.

(14) Paragraph 129 (interpretation) is amended in accordance with paragraphs (15) to (17).

(15) In sub-paragraph (1) (definition of “lump sum transitional tax-free amount”)—

(a)in paragraph (a) omit the “and” at the end;

(b)after paragraph (b) insert—

“(c)each stand-alone lump sum (if any) to which the individual has, before 6 April 2024, become entitled under a registered pension scheme, so far as no charge to income tax under Part 9 of ITEPA 2003 or Part 4 of FA 2004 arises in respect of it, and

(d)where a benefit crystallisation event within sub-paragraph (2)(a) of paragraph 20 of Schedule 36 to FA 2004 (pre-commencement pensions) was treated as having occurred before 6 April 2024 in relation to the individual, an amount equal to 25% of the amount treated as crystallised by that event under sub-paragraph (2)(b) of that paragraph.”.

(16) In sub-paragraph (2) (definition of “lump sum and death benefit transitional tax-free amount”)—

(a)omit the “and” at the end of paragraph (a);

(b)at the end of sub-paragraph (b) insert “, and

“(c)where a benefit crystallisation event within sub-paragraph (2)(a) of paragraph 20 of Schedule 36 to FA 2004 (pre-commencement pensions) was treated as having occurred before 6 April 2024 in relation to the individual, an amount equal to 25% of the amount treated as crystallised by that event under sub-paragraph (2)(b) of that paragraph.”.

(17) In sub-paragraph (5) (other definitions)—

(a)at the appropriate place insert—

““stand-alone lump sum” has the meaning given by article 25 of the Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572);” (2);

(b)in the final entry in the list, after “uncrystallised funds pension lump” insert “sum”.

(18) Paragraph 130 (statements for certain members who would not otherwise receive one in the tax year 2024/25) is amended in accordance with paragraphs (19) and (20).

(19) For sub-paragraph (3) substitute—

“(3) The statement must contain the information in regulation 14(3) of the Provision of Information Regulations (percentage of standard lifetime allowance expended by benefit crystallisation events) in respect of benefit crystallisation events occurring before 6 April 2024.” (3).

(20) In sub-paragraph (4), in the definition of “the Provision of Information Regulations” at the end insert “, as those regulations had effect immediately before 6 April 2024”.

(21) After paragraph 130 insert—

“Lump sums paid on or after 6 April 2024 where entitlement arose before that date

130A.—(1) This paragraph applies in relation to a lump sum to which a member of a registered pension scheme becomes entitled before 6 April 2024 and which is paid on or after that date.

(2) The amendments made by Schedule 9 to FA 2024 and these regulations are to be disregarded for the purposes of determining—

(a)the extent (if any) to which the lump sum is a lump sum within subsection (1) of section 166 of FA 2004 (lump sum rule), and

(b)the tax treatment of the lump sum.” (4).

(22) For the italic heading before paragraph 132 substitute—

“Modifications of scheme rules”.

(23) In paragraph 132—

(a)the existing text becomes sub-paragraph (1);

(b)in that sub-paragraph, after “member’s entitlement to”, in both places insert “, or to the payment of,”.

(c)after that sub-paragraph insert—

“(2) The amendments of Part 4 of FA 2004 made by or under this Schedule do not affect the interpretation of any relevant rule of a registered pension scheme.

(3) For the purposes of sub-paragraph (2), a rule of a registered pension scheme is “relevant” if the rule imposes a limit on the amount of a benefit payable under the scheme to, or in respect of, a member by reference to the member’s lifetime allowance, the standard lifetime allowance or the lifetime allowance charge.

(4) In this paragraph “lifetime allowance”, “standard lifetime allowance” and “lifetime allowance charge” have the same meaning as in Part 4 of FA 2004 as that Part had effect immediately before 6 April 2024.

(5) This paragraph ceases to have effect at the end of the tax year 2028-29.”.

(24) After paragraph 132 insert—

“Continuity of the law

132A.—(1) This paragraph applies where any provision of or made under this Schedule re-enacts (with or without modification) a provision of the pensions tax code that is repealed by or under this Schedule.

(2) The repeal and re-enactment does not affect the continuity of the law.

(3) Anything done (including any subordinate legislation made) or having effect as if done, under or for the purposes of the repealed provision that could have been done under or for the purposes of the corresponding provision of the pensions tax code, if in force or effective immediately before the commencement of that corresponding provision, has effect thereafter as if done under or for the purposes of that corresponding provision.

(4) Any reference (express or implied) in any enactment, instrument or document to a provision of the pensions tax code shall be construed (so far as the context permits) as including, as respects times, circumstances or purposes in relation to which the corresponding repealed provision had effect, a reference to that corresponding provision.

(5) Any reference (express or implied) in any enactment, instrument or document to a repealed provision shall be construed (so far as the context permits) as respects times, circumstances or purposes in relation to which the corresponding provision of the pensions tax code has effect, as being or (according to the context) including a reference to that corresponding provision.

(6) This paragraph has effect subject to any specific transitional provision or saving contained in or made under this Schedule.

(7) In this paragraph a reference to an enactment being repealed includes its being substituted or revoked.

(8) In this paragraph “pensions tax code” means—

(a)Part 4 of FA 2004 (pension schemes) and subordinate legislation made under it, and

(b)Part 9 of ITEPA 2003 (pension income) and subordinate legislation made under it.”.