The Taxation of Pension Schemes (Transitional Provisions) (Amendment) Order 2011 (SI 2011/732) has recently been laid before Parliament.

The amending regulations are intended to implement changes to transitional protection for pensions taxation purposes, following announcements by HMRC last year.

The regulations also intend to do the following:

  • Relax the requirement that a member must become entitled to all his benefits under a scheme on the same date to qualify for a protected pension age. A six-month window will now apply.
  • Transitional protection will be preserved where the member dies before the entitlement to the last of the pensions arises, if the scheme administrator considers that he would have become entitled to all his benefits within the six-month window had he not died.
  • Apply protected pension age protection to lump sums that would have qualified as pension commencement lump sums had they been paid before 6 April 2010, but which were not paid until after that date.
  • Rectify the unintended effect of last year’s increase of the normal minimum pension age from 50 to 55. Protected pension age protection will now apply to such individuals if certain conditions are satisfied.

The regulations will come into force on 6 April 2011, but some provisions will apply retrospectively