Citation, commencement and interpretation

1. —(1) These Regulations may be cited as the Registered Pension Schemes (Surrender of Relevant Excess) Regulations 2006, and shall come into force on 6th April 2006.

(2) In these Regulations, references to provisions are references to provisions of the Finance Act 2004.

(3) In these Regulations, “the relevant excess” has the meaning given by paragraph 12(6) of Schedule 36( 3 ).

Rights representing the relevant excess

2. The rights that are to be treated as representing the relevant excess are rights that—

(a) meet the qualification condition (see regulation 3), and

(b) are valued in accordance with the computation condition (see regulation 4).

The qualification condition

3. —(1) The rights that meet the qualification condition are all the individual’s uncrystallised rights with the exception of excluded rights.

(2) Rights are excluded rights if—

(a) they are rights surrendered or transferred in any of the circumstances specified in paragraphs (a), (b), (c) and (e) of section 172A(5) (surrenders of benefits and rights), or

(b) they are rights to which the individual has a prospective entitlement as a dependant of another individual.

The computation condition

4. —(1) Rights are valued in accordance with the computation condition if the value of the rights surrendered—

(a) is determined in accordance with section 212 (valuation of uncrystallised rights) on the date of the surrender, and

(b) as so determined, is equal to the relevant excess.

(2) If rights are surrendered on more than one occasion, the value of the rights surrendered—

(a) is to be determined separately for each surrender, and

(b) is the aggregate of the values as so determined.

Surrenders and unauthorised payments

5. Subsections (2) and (4) of section 172A (surrenders of benefits and rights) do not apply to a surrender of rights that are to be treated as representing the relevant excess to the extent that the value of the rights surrendered, determined in accordance with regulation 4, does not exceed the relevant excess.

Modification of conditions of pension schemes

6. The rules of any pension scheme to which paragraph 1(1) of Schedule 36 (deemed registration of existing schemes) applies shall be modified so as to provide that a member may surrender rights that are to be treated as representing the relevant excess to the extent that the value of the rights surrendered, determined in accordance with regulation 4, does not exceed the relevant excess.