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Introduction

The purpose of this note is to consider the tax treatment in the hands of the member of the various authorised payments that are permitted from a registered pension scheme. It covers various lump sums, as well as regular payments, and looks at the tax treatment including whether PAYE has to be applied.

Many of these payments are considered in other notes, but not all of them as some are encountered relatively rarely in practice.

What follows is a full list of authorised lump sum and income payments (the pension rules and the lump sum rules).

Occasions where a payment from a pension scheme is compared to the lump sum, or lump sum and death benefit allowance (from 6 April 2024) are referred to as relevant benefit crystallisation event (RBCE). Prior to 6 April 2024, the term benefit crystallisation event (BCE) was used where scheme administrators needed to check if pension benefits arising exceed a member's available lifetime allowance (per FA 2004, s 216, now repealed).