PTM164600 - Information and administration: Requirement to provide a relevant benefit crystallisation statement to the member

Regulation 14 The Registered Pension Schemes (Provision of Information) Regulations 2006 - SI 2006/567 

When a relevant benefit crystallisation event (rBCE) occurs the member, or if the member has died the member’s personal representative, must be given a statement telling them how much of the member’s lump sum allowance and lump sum and death benefit allowance have been used up by the relevant benefit crystallisation event.  

The requirement to provide this relevant benefit crystallisation event statement will fall to the scheme administrator or an insurance company. 

When the scheme administrator has to provide a relevant benefit crystallisation event statement

The scheme administrator must give a relevant benefit crystallisation event statement to the member, or the member’s personal representative.  

The scheme administrator must give the member a relevant benefit crystallisation event statement:  

• at least once every tax year if the member is receiving a pension from the scheme, or  
• where the scheme administrator isn’t required to provide an annual relevant benefit crystallisation event statement for the tax year, within three months of a relevant benefit crystallisation event that occurred under the scheme in respect of the member.  

When the scheme administrator doesn't have to provide an annual rBCE statement

The scheme administrator doesn't need to provide an annual relevant benefit crystallisation event statement in the following circumstances:

• if an insurance company is required to provide the rBCE statement, or
• in respect of a pension to which the member had an actual entitlement before 6 April 2006

What should be included in the relevant benefit crystallisation event statement 

The relevant benefit crystallisation event statement must show the amount of the member's lump sum allowance and lump sum and death benefit allowance used up by:

• any relevant benefit crystallisation events under the scheme in respect of the member to the extent that sums and assets representing those benefits have not been transferred to another registered pension scheme
• where the scheme has received a transfer of rights in respect of a member, any relevant benefit crystallisation event prior to those transferred rights.

How to calculate the amount of the member's allowances expended

Regulation 7 The Registered Pension Schemes (Provisions of Information) Regulations 2006 - SI 2006/567

The amount of a member’s lump sum allowance or lump sum and death benefit allowance expended when a relevant benefit crystallisation event occurs is the non-taxable amount in relation to the lump sum which the member has become entitled to, or the full amount ofthe lump sum death benefit which a person is paid in respect of the member.  

The total amount of the member’s lump sum allowance, or lump sum and death benefit allowance, expended is the total of the amounts in respect of each relevant benefit crystallisation event that has occurred in relation to the member.  

You can read more about relevant benefit crystallisation events at PTM173000. 

Penalties 

Where a scheme administrator does not provide the member with a relevant benefit crystallisation event statement, or provides it late, the scheme administrator may be liable to a penalty. 

HMRC will not normally seek to raise a penalty where the scheme administrator has not been able to provide the statement to the member in the tax year in which the relevant benefit crystallisation event occurs as long as the member is provided with the statement within 3 months of the relevant benefit crystallisation event.