»Ê¹ÚÌåÓýapp

Glossary PTM000001

Limit on pension input amount

Section 172D Finance Act 2004

A registered pension scheme that is an occupational pension scheme is treated as making an unauthorised member payment where at any time during a pension input period in respect of:

• cash balance arrangement
• defined benefits arrangement

• a hybrid arrangement that includes the provision of cash balance benefits or defined benefits

• the member and a sponsoring employer are connected or the member is connected with a person who is connected to a sponsoring employer, and
• the pension input amount in respect of the pension input period for the arrangement in question exceeds the ‘notional unconnected person input amountâ€� in respect of the pension input period for the arrangement in question.

For this purpose, the pension input amount for the member is calculated in accordance with guidance from PTM053000

»Ê¹ÚÌåÓýapp ‘notional unconnected person input amountâ€� for this purpose is the amount the pension input amount would have been for the pension input period in question if, the member was not connected with a sponsoring employer or a person connected with a sponsoring employer, at any time during that input period.

»Ê¹ÚÌåÓýapp amount of the deemed unauthorised payment is the amount equal to the difference between the pension input amount for the member and the ‘notional unconnected person input amountâ€�.

»Ê¹ÚÌåÓýapp unauthorised member payment is treated as being made to the member whose pension input amount exceeds the ‘notional unconnected person input amountâ€� (or that member’s personal representatives).

For a definition of ‘connected person� see PTM027000

For a definition of ‘sponsoring employer� see PTM022000