Finance Act 2004

34(1)Schedule 29 applies with the following modifications.U.K.

(2)Paragraph 2 applies as if the reference in sub-paragraph (2) to the arrangement under which the member becomes entitled to the relevant pension were to the pension scheme and for sub-paragraphs (5) to (8) there were substituted—

“(5)If paragraph 2(2) does not apply F1..., the permitted maximum is—F2

F3(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)In this paragraph—

VULSR is the value of the individual’s uncrystallised lump sum rights under the pension scheme on 5th April 2006, calculated in accordance with paragraph 32 of Schedule 36,

[F4ULA is the underpinned lifetime allowance,]

FSLA is £1,500,000 (the standard lifetime allowance for the tax year 2006-07), and

ALSA is the [F5greater of the additional lump sum amount and nil].

(7A)The additional lump sum amount is—

where—

• LS is the lump sum paid (but this is subject to [F6sub-paragraphs (7AA) and (7B)]),

• [F7AC is -

  (a)

  in a case where the member becomes entitled to the pension in connection with which the lump sum is paid before reaching the age of 75, the amount crystallised by reason of the member becoming entitled to the pension, and

  (b)

  in a case where the member becomes entitled to that pension after reaching that age, the amount that would have been so crystallised but for paragraph 2 of Schedule 32,

  (but this is subject to sub-paragraphs [F8(7AA) to (7B))],] F9...

• VUR is the value of the individual’s uncrystallised rights under the pension scheme on 5th April 2006, calculated in accordance with paragraph 33 of Schedule 36[F10, and

• CSLA is the current standard lifetime allowance.]

[F11(7AA)Where the pension in connection with which the lump sum is paid is a scheme pension under a money purchase arrangement [F12that is not a collective money purchase arrangement], AC is the scheme pension purchase price, as it would be defined by paragraph 3 if the words “but subject to sub-paragraph (8)” in sub-paragraph (7A) and sub-paragraph (8) were omitted.]

[F13(7AB)Where paragraph 1A applies to the lump sum, AC is the total of—

(a)the sums held, at the time the lump sum is paid, for the purpose of providing the pension at that time expected to be the pension in connection with which the lump sum is paid, and

(b)the market value at that time of the assets held at that time for that purpose.

(7AC)Where paragraph 1B applies to the lump sum, AC is the total of—

(a)the sums held, at the time the lump sum is paid, for the purpose of providing the expected pension (see paragraph 1B(2)(b)), and

(b)the market value at that time of the assets held at that time for that purpose.]

[F14(7AZA)The underpinned lifetime allowance” is the greater of the current standard lifetime allowance and £1,800,000 (the standard lifetime allowance for the tax year 2011-12).]

(7B)Any part of [F15what would otherwise be LS or AC] which represents rights attributable to a disqualifying pension credit is to be disregarded.

F3(7C). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .”

(3)Omit paragraph 3 (applicable amount for pension commencement lump sums) [F16(but without prejudice to its operation for the purposes of paragraph 2(7AA) of Schedule 29 as inserted by sub-paragraph (2))].