The lifetime allowance charge was originally described as a ‘recovery’ charge. Although the expression is now little used it helps to describe its application. It is applied to registered pension schemes and recovers tax reliefs in respect of benefits that exceed the lifetime allowance.

The principle is extended to members of overseas pension schemes that have enjoyed UK tax relief (a relieved member of a relieved non-UK pension scheme). Only the funds that have enjoyed UK tax relief since 6 April 2006 are measured against the lifetime allowance. This introduces the concept of the relevant relieved amount which is defined in the legislation as:

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