PTM176430 - Lump sum allowance and lump sum and death benefit allowance: Fixed protection: Applying for fixed protection 2016
If you are looking for information about FP prior to 6 April 2024, please see the National Archives.
How to apply for fixed protection 2016
Applications for FP16 must be made online
Conditions required for a valid application for FP16
Giving up enhanced protection
Will HMRC accept all applications for FP16?
How will a member know if HMRC has accepted their application for FP16?
When HMRC may withdraw a FP16 reference number
Appealing against HMRC's refusal to issue or decision to withdraw a FP16 reference number
Notifying subsequent protection-cessation events
What happens if the member dies before they have made an application for FP16?
How to apply for fixed protection 2016
Parts 1 and 3 Schedule 4 Finance Act 2016
An application for fixed protection 2016 (FP16) may be made on or after 6 April 2016 until 5 April 2025.
Applications for FP16 made before 6 April 2016 were invalid and were not processed by HMRC. Where a member has made an invalid application as it was made too early, they can resubmit their application after 5 April 2016 until 5 April 2025.
An individual does not need to have already built up pension savings of more than £1,250,000 to apply.
If someone wants to apply for FP16 then they will need to meet certain conditions. These are that they:
- Were a member of a registered pension scheme or relieved member of a relevant non-UK pension scheme on 6 April 2016,
- Did not have any primary protection,
- Did not have enhanced protection on 6 April 2016,
- Did not have FP12 or FP14 on 6 April 2016.
Once a member is satisfied that they meet the conditions then they can apply to HMRC to get FP16.
Individual’s that applied and received a valid FP16 reference prior to the 15 March 2023 can accrue benefits and join new arrangements without losing their protection.
For individual’s that applied and received a valid FP16 after the 15 March 2023 there are restrictions on what they are able to do with their future pension savings, as there may be a protection-cessation event.
Applications for FP16 must be made online
Paragraph 14(3)(a), (b) and (c) Schedule 4 Finance Act 2016
Applications for FP16 must be made online on or after 6 April 2016 until 5 April 2025. An application can be made by either the member themselves or another individual on their behalf.
See link below for more details.
https://www.gov.uk/guidance/pension-schemes-protect-your-lifetime-allowance
Conditions required for a valid application for FP16
Paragraph 14(3) Schedule 4 Finance Act 2016
An application for GP16 must be made online on or after 6 April 2016 until 5 April 2025.
For the online application to be valid, certain conditions must be met. These conditions are that the application must:
- Be made by or on behalf of the individual concerned,
- Contain the individual’s title, full name, full postal address and email-address and, where the individual is not the applicant, contain the same details for the applicant as well,
- Give the individual’s date of birth,
- Give the individual’s national insurance number (or if they do not have a National Insurance number, give the reason for this),
- Contain a declaration that the member meets the conditions for FP16
- Contain a declaration that everything stated in the application is true and complete to the best of the applicant’s knowledge and belief,
- Contain a declaration that the individual has met the conditions referred to in the introduction above, and
- Contain a declaration that in the period from 6 April 2016 to the date the application is made, no protection-cessation event has occurred (if the individual made an application on or after 15 March 2023.)
There is no need to give any valuation of current or expected pension funds as part of the application.
Giving up enhanced protection
If a member has enhanced protection on 6 April 2016 then they cannot benefit from FP16.
Once a member has told HMRC that they plan to rely on enhanced protection they will have received a certificate with details of their protection. However, unlike primary protection a member can choose to give up enhanced protection.
If a member has enhanced protection only (without primary protection) then so long as they have given this up before 6 April 2016 they can apply for FP16.
If a member holds both primary and enhanced protection and they choose to give up enhanced protection, they will still have their primary protection. As a member cannot give up primary protection, this will stop them from benefitting from FP16.
If an individual wishes to give up enhanced protection they must tell HMRC in writing. The relevant legislation says that in such cases, enhanced protection ceases from the date HMRC receives this written notice. So enhanced protection cannot be given up from some future date. If a member wished to keep enhanced protection until 5 April 2016 they must have ensured that HMRC received their written notice on that date. Once an individual has given up enhanced protection they cannot change their mind. Enhanced protection cannot be re-instated. If a member gets FP16 by giving up enhanced protection and later finds they made the wrong decision they cannot get their enhanced protection back.
Will HMRC accept all applications for FP16?
Paragraph 14(1), (2), (4) and 16 Schedule 4 Finance Act 2016
As long as the member completes the prescribed form giving all the information that is requested (on or after 6 April 2016 until 5 April 2023) then the application is a valid application which will be accepted by HMRC.
Where HMRC refuse to accept an application, they must notify the member who has a right to appeal against the decision.
How will a member know if HMRC has accepted their application for FP16?
Paragraph 14(1) to (4) Schedule 4 Finance Act 2016
When HMRC has received an application and accepted it as valid they will issue the member with a reference number unless the member already has individual protection 2014 (IP14). This will be done online.
Where the member makes a valid application for FP16 but has already successfully applied for IP14, then their application is successful on a dormant basis. This means that HMRC will not issue the member with a reference number unless and until the member’s IP14 no longer applies. HMRC will notify the individual accordingly.
If IP14 no longer applies, the member must inform HMRC of this whereupon HMRC will issue the FP16 reference number.
When HMRC may withdraw a FP16 reference number
Paragraph 15 Schedule 4 Finance Act 2016
HMRC may withdraw a reference number that they have issued to a member if:
- Something contained in the member’s application with incorrect,
- The individual applied for FP16 on or after 15 March 2023 and has had a protection cessation event since their application was made,
- The member has failed to respond within the five deadline to a notice given by HMRC under paragraph 1 of Schedule 36 Finance Act 2008 relating to the member and FP16.
If HMRC withdraws a member’s FP16 they must notify the member to tell them that they have done so and give their reasons for the withdrawal. The member may appeal against the withdrawal of their reference number.
Appealing against HMRC's refusal to issue or decision to withdraw a FP16 reference number
Paragraph 16 Schedule 4 Finance Act 2016
Where HMRC has refused to accept a member’s application for FP16, they must notify the member that their application has been unsuccessful. The member may appeal against this decision to the First-tier or Upper-tier Tribunal as appropriate. The member may similarly appeal against HMRC’s decision to withdraw their reference number.
The member must tell HMRC if they want to appeal against the refusal to issue a reference number or the withdrawal of their reference number and they must do this within 30 days of the date when the notification of refusal/withdrawal was given. An appeal cannot be made where the application has been successful on a dormant basis.
Where the appeal is considered by the tribunal and relates to the refusal to issue a reference number, the tribunal will allow the appeal if the tribunal is satisfied that:
- the application was a valid application,
- everything in the application was correct, and
- that, at the time of their decision, withdrawal of the requested reference number would not, had it been issued, be authorised either because a protection-cessation event has occurred or because the individual has failed to comply, within the required time, with a notice they have been given under Paragraph 1 of Schedule 36 to Finance Act 2008 to provide information or a document to HMRC to allow their tax position to be checked.
If the above grounds are not satisfied the tribunal must dismiss the appeal.
If the tribunal finds that HMRC should have accepted the notice then HMRC must issue the member with a FP16 reference number.
Where the appeal is considered by the tribunal and relates to the withdrawal of a reference number, the tribunal will allow the appeal if the tribunal is satisfied that the withdrawal was not authorised on the grounds set out at When HMRC may withdraw a reference number above.
Notifying subsequent protection-cessation events
Paragraph 17 Schedule 4 Finance Act 2016
Individual’s that have made valid application for FP16 made on or after 15 March 2023 can have protection-cessation events occu. Individual’s that have valid application for FP16 prior to the 15 March 2023 can accrue benefits, join new arrangements and transfer without losing their protections.
An individual must notify HMRC if a protection-cessation event has occurred at a time when any of the following circumstances apply:
- the individual has been issued with a reference number following a successful application for FP16,
- the individual has a pending application for a FP16 reference number. A pending application is one where either the individual has made an application but does not yet know if it has been successful (i.e. they have not been issued with a reference number) or the application has been unsuccessful but an appeal is in progress against HMRC’s refusal to issue a reference number (an appeal, including a further appeal, is in progress for so long as it has not been either withdrawn or determined and there is no prospect of further appeal, or
- an appeal is in progress against HMRC’s decision to withdraw the individual’s FP16 reference number.
Where any of the above circumstances apply, the individual must notify HMRC that the protection-cessation event has occurred. The notice must be given within 90 days of the day on which the individual could first reasonably be expected to have known that the event has occurred. The notice must be given either using the online facility provided by HMRC for this purpose or by any other means authorised by HMRC in a particular case.
What happens if the member dies before they have made an application for FP16?
Paragraph 19 Schedule 4 Finance Act 2016
Where the member dies before making an application for FP16, their personal representatives (PRs) are able to do anything in relation to applying for FP16 that the member could have done.
So all of the above guidance applies to PRs in such circumstances. Where the application is being made by the member’s PRs there is a further condition for a valid application namely that the application must contain the individual’s date of death as well as their date of birth.
If, after the individual’s death, HMRC decides to withdraw a reference number issued to the individual they must give the notice of, and reasons for, to the individual’s PRs.