Section 637D | Uncrystallised funds pension lump sums ^F1

(1)Subject to subsection (2), where an uncrystallised funds pension lump sum is paid under a registered pension scheme—^F1

(a)no liability to income tax arises on 25% of the lump sum, and^F1

(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.^F1

(2)If—^F1

(a)an uncrystallised funds pension lump sum is paid under a registered pension scheme, and^F1

(b)25% of the lump sum is an amount that exceeds the permitted maximum,^F1

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—^F1

(a)so much of the member’s lump sum allowance as is available on the member becoming entitled to the lump sum (see section 637Q);^F1F2

(b)so much of the member’s lump sum and death benefit allowance as is available on the member becoming entitled to the lump sum (see section 637S).^F1F3