Extended treasures

A draft Treasury order relating to alterations to the rules affecting the tax treatment of protected pension lump sums has been published on HMRC’s website.

The order addresses the issue of practical difficulties faced by scheme administrators in relation to FA 2004 Sch 36 para 31. This states:

‘… where an individual was entitled on 5 April 2006 under a particular pension scheme to a lump sum exceeding 25% of their un-crystallised rights… one of the conditions that must be met for the lump sum to be paid tax free is that the individual must become entitled to all of their pensions (that were not in payment by 5 April 2006) under the scheme on the same day.’

Thus the problem that affects pension scheme administrators includes additional contributions by a member to a money...