SolvedSection 210 | Surchargeable unauthorised member payments
From legislation.gov.uk
(1)This section identifies which unauthorised member payments made by a registered pension scheme to or in respect of a person who is or has been a member of the pension scheme are surchargeable.
(2)If the surcharge threshold is reached before the end of the period of 12 months beginning with a reference date, each unauthorised member payment made to or in respect of the person in the surcharge period is surchargeable.
(3)The surcharge period is the period—
(a)beginning with the reference date, and
(b)ending with the day on which the surcharge threshold is reached.
(4)The first reference date is the date on which the pension scheme first makes an unauthorised member payment to or in respect of the person.
(5)Each subsequent reference date is the date, after the end of the previous reference period, on which the pension scheme next makes an unauthorised member payment to or in respect of the person.
(6)The previous reference period is the period of 12 months beginning with the previous reference date or, if the surcharge threshold is reached in that period, is the surcharge period ending with the date on which it was reached.
(7)The surcharge threshold is reached if the unauthorised payments percentage reaches 25%.
(8)The unauthorised payments percentage is the aggregate of the percentages of the pension fund used up by each unauthorised member payment made by the pension scheme to or in respect of the person on or after the reference date.
(9)The percentage of the pension fund used up on the occasion of an unauthorised member payment is—
Formula
where—
UMP is the amount of the unauthorised member payment, and
VR is an amount equal to the aggregate of the value of the member's rights under arrangements relating to the member under the pension scheme when the unauthorised payment is made (or, if the unauthorised member payment is made after the member has died or has otherwise ceased to be a member of the pension scheme, at the date when the member died or otherwise ceased to be a member).
(10)The value of the member’s rights under an arrangement on any date is the aggregate of—
(a)the value of the member’s crystallised rights under the arrangement on that date, calculated in accordance with section 211, and
(b)the value of the member’s uncrystallised rights under the arrangement on that date, calculated in accordance with section 212.