PTM072360 - Death benefits: types of pension: »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ drawdown pension: »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ capped drawdown pension from 6 April 2015
As of 6 April 2024 there is no longer lifetime allowance. If you are looking for information about protections, enhancement factors and the lifetime allowance charge please see these pages on .
If you are looking for information about the principles of lifetime allowance and benefit crystallisation events please see these pages of .
Glossary |
Continuing in »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ capped drawdown
Conversion of a »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ capped drawdown pension fund into a »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ flexi-access drawdown fund
Children of the member reaching age 23
Taxation of continuing capped drawdown pension
Continuing in »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ capped drawdown
A dependant who was in dependant바카라 사이트™s capped drawdown on 5 April 2015 may choose either to continue in dependant바카라 사이트™s capped drawdown or to convert to dependant바카라 사이트™s flexi-access drawdown. The dependant바카라 사이트™s capped drawdown rules continue to apply automatically, unless there is a conversion.
For so long as the dependant opts to remain in dependant바카라 사이트™s capped drawdown and there is no conversion event, the dependant바카라 사이트™s drawdown pension fund rules continue to apply to the dependant바카라 사이트™s drawdown pension fund. Briefly, this means that the existing dependant바카라 사이트™s drawdown pension fund continues to be used to provide dependant바카라 사이트™s capped drawdown pension. Any further funds designated after 6 April 2015 in the arrangement will be designated to the dependant바카라 사이트™s existing dependant바카라 사이트™s capped drawdown pension fund. The limit on the maximum amount of pension the dependant can draw each year will continue to apply as will all the other dependant바카라 사이트™s capped drawdown pension rules. For details on the dependant바카라 사이트™s capped drawdown pension rules (see PTM072320 onwards).
Conversion of a »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ capped drawdown pension fund into a »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ flexi-access drawdown fund
Paragraphs 22B to 22D Schedule 28 Finance Act 2004
If, on 5 April 2015, the dependant바카라 사이트™s existing »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ drawdown pension fund was paying a »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ capped drawdown pension (see above for the position where the dependant instead qualified for »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ flexible drawdown) certain events occurring after that date will result in the »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ capped drawdown pension fund being converted into a »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ flexi-access drawdown fund. These events are:
- the payment of excessive »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ drawdown pension
- the scheme administrator agreeing to a request for conversion
- certain transfers.
For further guidance on each of these events see PTM072450.
Children of the member reaching age 23
Paragraph 15 Schedule 28 Finance Act 2004
Paragraph 6 Schedule 5 Finance Act 2016
Where a child of the member
- qualifies as a dependant because they are aged under 23 (rather than through mental or physical impairment)
- first designated funds into a capped drawdown fund before 6 April 2015 and
- reaches age 23 on or after 16 September 2016
they can continue to receive »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ income withdrawal or a short-term annuity from capped drawdown as authorised payments regardless of their age.
Taxation of continuing capped drawdown pension
Sections 579A and 579CZA(1) and (4) Income Tax (Earnings and Pensions) Act 2003
The »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ capped drawdown pension is taxable as pension income unless:
- it is paid on or after 6 April 2015, and
- it is in respect of a deceased member who had not reached age 75 at the date of their death, and
- no payments of income withdrawal or short-term annuity were made from the »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ capped drawdown fund (or any fund represented by the capped drawdown fund) before 6 April 2015.
Where taxable, the »å±ð±è±ð²Ô»å²¹²Ô³Ù²õ바카라 사이트™ capped drawdown payments are taxed at the dependant바카라 사이트™s marginal rate as pension income in the tax year in which they are paid. The scheme administrator is required to deduct income tax from the payments, under the PAYE regulations.