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HMRC internal manual

Pensions Tax Manual

Annual allowance: pension input periods: nominating the end date for a pension input period

Glossary PTM000001
   

 

First pension input period
Nominations made before 19 July 2011
Nominations made on or after 19 July 2011
Nominations made after 5 April
Subsequent pension input periods
End date for a first pension input period that starts on 5 April
Requirements for making a nomination
More than one nomination made for the same pension input period

First pension input period

Section 238 Finance Act 2004

When a nomination can be made to change the end date of the first pension input period will depend on whether:

  • the nomination is made before 19 July 2011 or
  • on or after that date, and
  • if a nomination to change the end date has been made already in respect of the same pension input period.

Nominations made before 19 July 2011

Where a nomination was made before 19 July 2011 it was possible to nominate a past, current or future date for the end date of the first pension input period.

Example 1

First pension input period starts on 2 May 2011

On 1 July 2011 a nomination is made to change, retrospectively, the end date of the first pension input period to 31 May 2011.

When the nomination is for a current or future date, the new end date cannot be outside the period of 12 months that starts on the first day of the pension input period.

Example 2

First pension input period starts on 2 May 2011.

On 1 July 2011 a nomination is made to change the end date of the first pension input period to 1 May 2012. (This is the latest possible end date that could be nominated for a pension input period that started on 2 May 2011.)

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Nominations made on or after 19 July 2011

Where a nomination is made on or after 19 July 2011 the chosen new end date for the pension input period can be:

  • the same date on which the nomination is made or
  • any day on or after the date the nomination is made.

The chosen end date cannot be more than 12 months after the first day of the pension input period.

It is not possible to change the pension input period end date retrospectively.

Example 3

First pension input period starts on 2 May 2011.

On 1 May 2012 a nomination is made to change the end date of the first pension input period to 1 May 2012. (This is the latest possible end date that could be nominated for a pension input period that started on 2 May 2011 and the latest possible date on which the nomination could be made).

Example 4

First pension input period starts on 15 June 2011.

On 21 July 2011 a nomination is made to change the end date of the first pension input period to 31 December 2011.

(The latest possible end date that could be nominated for a pension input period that started on 15 June 2011 is 14 June 2012.)

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Nominations made after 5 April

Without any nomination, the first pension input period for an arrangement will end on the following 5 April. It is possible to nominate a different end date after that 5 April has passed.

The chosen end date can be the same date on which the nomination is made or the nomination can be made for a future date. The chosen end date cannot be outside the period of 12 months that starts on the first day of the pension input period.

It is not possible to change the end date retrospectively.

Note, if the first pension input period actually starts on a 5 April it will end on that same 5 April (and not the following 5 April) unless a later end date is nominated. Such a nominated end date must be within 12 months of that 5 April. A nomination for a later end date can be made on or after that 5 April but this cannot be a date before the nomination is made.

Example 5

First pension input period starts on 15 June 2011.

In the absence of any nominations, this pension input period would have finished on 5 April 2012.

On 1 May 2012 a nomination is made to change the end date of the first pension input period to 31 May 2012.

(The latest possible end date that could be nominated for a pension input period that started on 15 June 2011 is 14 June 2012.)

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Subsequent pension input periods

The nominated end date for the pension input periods that follow the first pension input period can be:

  • the same date on which the nomination is made, or
  • any day on or after the date the nomination is made.

The chosen end date must fall in the tax year that follows the tax year in which the previous pension input period ended, but it can be for any date in that following tax year.

It is not possible to retrospectively change the end date of any subsequent pension input period.

Without nomination a subsequent pension input period will end on the anniversary of the date on which the previous pension input period ended.

Example 6

First pension input period starts on 15 June 2011.

On 1 May 2012 a nomination is made to change the end date of the first pension input period to 31 May 2012.

First pension input period ends on 31 May 2012.

Second pension input period starts on 1 June 2012.

No nomination is made to change the end date of second pension input period.

Second pension input period ends on 31 May 2013.

Third pension input period starts on 1 June 2013.

On 1 September 2013 a nomination is made to change the end date of third pension input period to 31 December 2014.

Third pension input period ends on 31 December 2014.

Fourth pension input period starts on 1 January 2015.

No nomination is made to change the end date of fourth pension input period.

Fourth pension input period ends on 31 December 2015.

And so on unless the end date is changed for any subsequent pension input period.

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End date for a first pension input period that starts on 5 April

Where the first pension input period actually starts on 5 April it will end on that same date, unless a nomination is made to change the end date. For example, where the first pension input period for an arrangement starts on 5 April 2012 it will also end on 5 April 2012, unless a nomination is made to change the end date for that period.

A nomination to change the end date can be made after the 5 April has passed - see Nominations made after 5 April above.

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Requirements for making a nomination

For other money purchase arrangements both the scheme administrator and the member can nominate a pension input period end date.

Where the individual wants to nominate a new pension input period end date for an other money purchase arrangement, they must tell the scheme administrator of the pension scheme holding that arrangement. Likewise, the scheme administrator must tell the member if they want to change the pension input period end date for an arrangement.

Only the scheme administrator can nominate an end date for a pension input period in relation to a defined benefits arrangement, cash balance arrangement or hybrid arrangement. The scheme administrator must inform the individual where the scheme administrator wants to change the end date in respect of such an arrangement.

The form of the notification in relation to a particular type of arrangement is a matter between the individual and the scheme administrator. For example, where the individual is able to nominate, the scheme administrator might require a written notification or the notification may need to be given electronically. Alternatively, a notification by the scheme administrator might be done by notifying the individual personally or by giving the details in the pension scheme handbook or on the pension scheme website. A financial adviser or other intermediary cannot nominate on behalf of a member although they can pass on a written request made by the member.

In designing the processes for notifying a new pension input period end date the following points need to be borne in mind:

  • the need for an audit trail. A scheme needs evidence to satisfy the member and HMRC. HMRC may enquire into an individual’s Self assessment return. So individuals will need evidence to back up what they say on their Self Assessment return.
  • the requirement to keep information in accordance with Regulation 18 of the Registered Pension Schemes (Provision of Information) Regulations 2006 (SI 2006/567) - see PTM160200.
  • the ability of the member to be able to receive the information. For example a member may not have internet or e-mail access. Alternatively the member may have a visual impairment, which makes using electronic communication difficult without using specialist software or equipment.

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More than one nomination made for the same pension input period

In effect, only one nomination can be made to change the end date for a particular pension input period for an arrangement.

Both the scheme administrator and the member can nominate the end date for a pension input period relating to an other money purchase arrangement. If both the scheme administrator and member nominate an end date for the same pension input period it is the nomination that is made first that takes precedence.

Example

Marcus is a member of an other money purchase arrangement. The pension input period for this arrangement started on 1 June 2011. Without a nomination the pension input period will end on 5 April 2012.

On 1 September 2011 Marcus sends a notice to his scheme administrator telling them that he wants the end date of his pension input period to be 31 May 2012. On 3 September 2011 the scheme administrator sends a notice to Marcus telling him that they want the pension input period to end on 31 March 2012.

As Marcus was the first person to nominate a new end date his nomination takes precedence. The pension input period end date will be 31 May 2012. The first pension input period will end in the tax year 2012-13.

Only the scheme administrator can nominate an end date for a pension input period in relation to a defined benefits arrangement or cash balance arrangement. Where the scheme administrator nominates an end date for a particular pension input period that chosen end date cannot be undone by choosing another end date for the same pension input period.