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HMRC internal manual

Pensions Tax Manual

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Protection from the lifetime allowance charge: lifetime allowance enhancement factors: The relevant relievable amount for an other money purchase arrangement

Glossary PTM000001
   

 

How to calculate the relevant relievable amount for an other money purchase arrangement
Example of calculating the relevant relievable amount for an other money purchase arrangement

How to calculate the relevant relievable amount for an other money purchase arrangement

Sections 225(6) and (7) Finance Act 2004

Where the individual’s arrangement under their recognised overseas pension scheme is a money purchase arrangement other than a cash balance arrangement, the other money purchase relevant relievable amount is calculated in the following way.

Establish the total amount of contributions made by or in respect of the individual to the other money purchase arrangement between the dates determined under a. and b. below:

  1. the latest of the following dates:
* the date that the individual became someone who is not a relevant overseas individual (see [PTM095310](https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm095310))
* the date that benefits first began to accrue to or in respect of the individual under the recognised overseas pension scheme other money purchase arrangement, and
* 6 April 2006.
  1. the earliest of the following dates:
  • immediately before the transfer was made,
  • the date that the individual ceased to be someone who is not a relevant overseas individual, and
  • the date that benefits ceased to accrue to or in respect of the individual under the recognised overseas pension scheme other money purchase arrangement.

 

If the individual had not been a relevant overseas individual during another part of the overseas arrangement active membership period (see PTM095410) relating to the same other money purchase arrangement then the amount calculated in the same way in respect of that other part-period should be added to the above amount.

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Example of calculating the relevant relievable amount for an other money purchase arrangement

Kate transferred £350,000 from her recognised overseas pension scheme other money purchase arrangement to a registered pension scheme on 6 June 2012.

Kate began working in France on 19 July 2003 and joined her recognised overseas pension scheme other money purchase arrangement on 6 March 2004. She returned to work in the UK on 1 January 2008 and became someone who is not a relevant overseas individual with effect from 6 April 2007. The latest date under step a. above is therefore 6 April 2007.

Kate started working in the USA on 1 June 2010 and ceased to be someone who is not a relevant overseas individual with effect from 6 April 2010. That was before she made the transfer to her registered pension scheme and before she ceased to accrue benefits under the recognised overseas pension scheme other money purchase arrangement.

The total contributions made by or in respect of Kate between 6 April 2007 and 6 April 2010 amounted to £150,000. The other money purchase relevant relievable amount is therefore £150,000.