Certain payments of lump sums that would otherwise have been unauthorised payments and thereby have triggered unfavourable tax consequences are nevertheless recognised as authorised payments and treated as pension-commencement lump sums in certain circumstances (Registered Pension Schemes (Authorised Payments) Regulations 2009 (SI 2009/1171, reg. 5)).

Three types of lump sum paid in error are treated in this way:

1Commencement lump sums based on pension errors

2Commencement lump sums under money-purchase arrangements and based on calculation errors

3Commencement lump sums paid after death

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