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HMRC internal manual

Pensions Tax Manual

HM Revenue & Customs
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International: early election for a deemed BCE by relieved members

Glossary PTM000001


Paragraph 15 Schedule 34 Finance Act 2004

A relieved member of a relieved non-UK pension scheme may elect that a benefit crystallisation event is deemed to have taken place. A member who chooses to do so must send form APSS 254 to HMRC specifying the date on which a benefit crystallisation event is to be treated as occurring in respect of benefits under the relieved non-UK pension scheme. The form should be sent toPension Schemes ServicesHM Revenue & CustomsFitz Roy HouseNottinghamNG2 1BD

In these circumstances the amount deemed to have crystallised from the scheme is the untested portion of the individual’s relevant relieved amount as calculated in PTM113420.

Such an election allows an individual who leaves the UK permanently, and so stops receiving any of the UK tax reliefs, to crystallise their benefits under their relieved non-UK pension scheme. In this way they can determine whether or not they are liable to a lifetime allowance charge and can discharge any UK tax obligation at an early date rather than waiting for what might be several years until their benefits from that scheme actually crystallise.

An early election does not prevent the member subsequently becoming liable to a member payment charge - see PTM113200. That will depend on what payments are made to, or in respect of, the individual by the scheme after the election. Nor does an election have any effect on an individual’s liability to an annual allowance charge in the tax year in which the election is made. That will be determined in accordance with the guidance starting at PTM113300.

An individual who makes an early election should inform the scheme manager of the relieved non-UK pension scheme including the date of the deemed crystallisation event. The scheme manager will not have to supply HMRC with information about the subsequent crystallisation of those pension rights subject to there being subsequently UK tax-relieved contributions paid to the scheme in respect of the member or UK tax-exempt provision made under the scheme in relation to the member.