CG67690 - Pension Schemes: Lump sums receivable
Section 237 Taxation of Chargeable Gains Act 1992
No chargeable gain accrues where a lump sum is received by an individual under the terms of a pension scheme. A `pension scheme’ includes an individual pension arrangement.
For the purpose of relief under TCGA92/S237 the term `any allowance, annuity or capital sum payable out of any superannuation fund’ should be taken as including
- sickness, death and retirement benefits, from trade union funds where these are contractual;
- payments from friendly societies where there is no policy of assurance; and
- payments under death benefit schemes which take the form of term life assurance up to the date of retirement.
No chargeable gain accrues on the commutation of a pension after retirement.
Benefits arising under a trust fund for self-employed persons established under ICTA88/S620 normally take the form of non-commutable retirement annuities payable either to the person who took them out or in certain cases to his widow or to his or her surviving civil partner. If no annuity becomes payable, the benefits may instead take the form of a return of premiums with interest to the personal representatives. The gain accruing on the return of such premiums is exempt.