If an individual’s lifetime allowance has been exhausted, any further amounts that crystallise will be subject to the lifetime allowance charge at a rate of 55% (excess paid as a lump sum and triggered by BCE 6 or BCE 7) or 25% (excess retained), or a combination of both.

The charge (55%) paid by the scheme administrator by reference to an excess lump sum is treated as part of the lump sum and is described as the ‘scheme-funded tax payment’.

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