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HMRC internal manual

Pensions Tax Manual

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Information and administration: information requirements when a member flexibly accesses their benefits: action a member must take if they convert their capped drawdown pension fund to a flexi-access drawdown fund

Glossary PTM000001
   

The circumstances in which a member must notify that they converted to flexi-access drawdown
When the notification must be made by
When the member doesn’t have to provide a flexible access notification 

Regulation 14ZE The Registered Pension Schemes (Provision of Information) Regulations 2006 - SI 2006/567

The circumstances in which a member must notify that they converted to flexi-access drawdown

If a member converts their capped drawdown pension fund to a flexi-access drawdown fund voluntarily (under paragraph 8C Schedule 28 Finance Act 2004) they may have to tell the other schemes they belong to about this conversion.

The member must tell the scheme administrator of any scheme under which they are an accruing member on or after the date they converted to flexi-access drawdown:

  • that they have converted into flexi-access drawdown and
  • the date of that conversion.

An accruing member is a member who is accruing benefits under a money purchase arrangement or a hybrid arrangement. Accruing benefits in this context means:

  • In the case of an other money purchase arrangement

    • a relievable contributions has been paid by or on behalf of the member
    • an employer has paid a contribution in respect of the member, or
    • a contribution made by an employer of the member but not in respect of the member, subsequently becomes held for the purposes of an other money purchase arrangement for the member.
  • In the case of a cash balance or hybrid arrangement there are presently arrangement for the accrual of benefits in respect of the member under the arrangement.

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When the notification must be made by

The member must make the flexible access notification within 91 days beginning with the later of:

  • the date of conversion to flexi access - if the member was an accruing member of any registered pension scheme on that date,
  • if the member wasn’t an accruing member of any registered pension scheme on that date - the first date that the member began accruing benefits under any scheme.

If the individual becomes an accruing member under a registered pension scheme after the start of this 91 day period they must notify the new scheme administrator within 91 days of starting to accrue benefits. However, this doesn’t apply if the member joined the scheme as a result of transfer after the conversion date that was a recognised transfer from a registered pension scheme.

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When the member doesn’t have to provide a flexible access notification

The member doesn’t have to give a flexible access notification to:

  • the scheme administrator of the registered pension scheme under which the member converted from capped drawdown to flexi-access drawdown.
  • a scheme administrator if they have already given them a flexible access notification under:

    • this provision,
    • regulation 14ZB (member to notify after receiving a flexible access statement from a registered pension scheme administrator scheme notification) see PTM166400, and
    • regulation 14ZD (member to notify due to pre 6 April 2015 flexible drawdown), see PTM166500.