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RPSM11101510 - Technical pages: lifetime allowance: level of lifetime allowance: applying for fixed protection

As an application for fixed protection must have been made before 6 April 2012, this page has been retained mainly for information purposes.

[The Registered Pension Schemes (Lifetime Allowance Transitional Protection) Regulations 2011 SI 2011/1752] 

A member can apply for fixed protection if they do not have either primary protection or enhanced protection. They do not need to have already built up pension savings of more than £1.5 million to apply.

If someone wants to apply for fixed protection then they will need to meet certain conditions. These are that they

Once a member is satisfied that they meet these conditions then they can apply to HMRC to get fixed protection.

Can the member apply on-line?
Information the member will need to give when making an application for fixed protection
Giving up enhanced protection
Will HMRC accept all applications for fixed protection?
How will a member know if HMRC has accepted their application for fixed protection?
Deadline for applying for fixed protection
Late applications
Appeal against HMRC’s refusal to accept a notice
When HMRC may revoke a certificate

Can the member apply on-line?

To get fixed protection the member will need to complete the application form, APSS227. Although the application form is available on the HMRC website, the member will not be able to complete this on-line. They will be able to print off a copy of this form from the HMRC website and once they have completed it, they will need to send this to be received by HMRC before 6 April 2012.

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Information the member will need to give when making an application for fixed protection

Applications for fixed protection should be made on the form APSS227 which is available on the HMRC website (www.hmrc.gov.uk). To complete the application form for fixed protection the member will need to give their

  • name
  • National Insurance number (or if they do not have a National Insurance number, the reasons for this), and
  • address.

The member will also need to confirm that they do not have primary protection; enhanced protection (or if they currently do have enhanced protection, they will give this up before 6 April 2012) and sign the declaration on the form.

There is no need to give any valuation of current or expected pension funds as part of the application.

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Giving up enhanced protection

If a member has enhanced protection on 6 April 2012 then they cannot benefit from fixed protection.

Once a member has told HMRC that they plan to rely on enhanced protection they will have received a certificate with details of their protection. However, unlike primary protection a member can choose to give up enhanced protection.

If a member has enhanced protection only (without primary protection) then so long as they give this up before 6 April 2012 they can apply for fixed protection.

If a member holds both primary and enhanced protection and they choose to give up enhanced protection, they will still have their primary protection. As a member cannot give up primary protection, this will stop them from benefitting from fixed protection.

If an individual wishes to give up enhanced protection they must tell HMRC in writing. The relevant legislation says that in such cases, enhanced protection ceases from the date HMRC receives this written notice. So enhanced protection cannot be given up from some future date. If a member wishes to keep enhanced protection until 5 April 2012 they will have to ensure that HMRC receives their written notice on that date. Clearly this will be difficult to arrange. A member may choose to defer giving their written notice so that its receipt by HMRC is as close as possible to 5 April 2012. But they will need to take care not to leave things too late, so that HMRC do not receive their notice until on or after 6 April 2012 as they will not then be eligible to apply for fixed protection.

Once an individual has given up enhanced protection they cannot change their mind. Enhanced protection cannot be re-instated. If a member gets fixed protection by giving up enhanced protection and later finds they made the wrong decision they cannot get their enhanced protection back.

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Will HMRC accept all applications for fixed protection?

As long as the member completes the prescribed form giving all the information that is requested and they sign the declaration then HMRC will accept their application.

The member’s completed and signed form must also be received by HMRC by 5 April 2012.

Applications received after 5 April 2012 will not be accepted. 

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How will a member know if HMRC has accepted their application for fixed protection?

When HMRC has received and processed the member’s form they will send them a certificate to state that they have fixed protection. The member will need to keep this certificate safe so that they can give this information to their pension scheme(s) if they want to rely on this protection when they come to take their benefits.

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Deadline for applying for fixed protection

Applications must be received by HMRC no later than 5 April 2012. If, when it is received by HMRC, the form contains any mistakes or is incomplete the HMRC will return it to the member to correct or fill in the missing information. If HMRC does return the form to the member for correction in the four weeks leading up to 5th April 2012 or after that date then they will be allowed four weeks from the date the form is returned to correct and return it to HMRC. If the member does not do so within that time then HMRC will not process the application.

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Late applications

There is no provision for late applications. Members must ensure that their application is made on time.

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Appeal against HMRC’s refusal to accept a notice

Where HMRC has refused to accept their notice, a member can ask HMRC to give the reasons for this. The member may also appeal against this decision. The member must tell HMRC if they want to appeal against the decision and they must do this within 30 days of the date when the refusal was given.

Where the appeal is considered by the tribunal, the tribunal will decide whether HMRC was entitled to take the view that the notice that the member gave

If the tribunal finds that HMRC should have accepted the notice then they may tell HMRC to issue the member with a fixed protection certificate.

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When HMRC may revoke a certificate

HMRC may revoke a certificate that they have issued to a member if

  • they have reason to believe that the member has had benefit accrual under an arrangement under a registered pension scheme (See RPSM11101530);
  • there has been an impermissible transfer into an arrangement under a registered pension scheme relating to the member;
  • a transfer of sums or assets held for the purposes of (or representing accrued rights under) any arrangement is made that is not a permitted transfer (see RPSM11101520);
  • an arrangement is made for the member that is not made under permitted circumstances: or
  • the member does not meet the requirements for fixed protection because they
  • The member’s fixed protection certificate may also be revoked if the member has failed to respond within the given deadline to a notice given by HMRC under paragraph 1 of Schedule 36 to Finance Act 2008 relating to the member and fixed protection.

If HMRC revokes a member’s fixed protection certificate then the member can ask HMRC to give the reasons for this. The member may also appeal against this decision. The member must tell HMRC if they want to appeal against the decision and they must do this within 30 days of the date when the refusal was given.

Where the appeal is considered by the tribunal, the tribunal will decide whether HMRC had grounds to do this.

If the tribunal allows the member’s appeal then they may tell HMRC to issue the member with a fixed protection certificate.


 

Glossary (RPSM20000000)