PTM176520 - Lump sum allowance and lump sum and death benefit allowance: Individual protection: Applying for individual protection 2014
If you are looking for information about IP prior to 6 April 2024, please see the National Archives.
Applying for individual protection 2014 (IP14)
"Relevant arrangement" and "relevant amount"
How to apply for individual protection 2014
Information that will need to be given when making an application for IP14
HMRC confirming receipt of an IP14 application
Deadline for applying for IP14
HMRC refusal to accept an application for IP14
Appeal against HMRC's refusal to accept an application
Incorrect information provided on the application
Replacement and duplicate certificates
Late applications
When HMRC may revoke a certificate
Actions following a member's divorce where their pension rights have become subject to a pension debit
Documents relating to an IP14 application that need to be kept
HMRC reviews the information provided on the online application
Fraudulent or negligent information provided in connection with the notification
Applying for individual protection 2014 (IP14)
The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowance Transitional Protection)(Individual Protection 2014 Notification) Regulations 2014 – SI 2014/1842
An application for IP14 must be received by HMRC by 5 April 2017.
If someone wants to apply for IP14 then they will need to meet all the following conditions:
- they have one or more ‘relevant arrangements’ on 5 April 2014
- their relevant amount on 5 April 2014 is more than £1,250,000
- they do not have primary protection (whether active or dormant)
A member can apply for IP14 where they already have enhanced protection, fixed protection, fixed protection 2014 or fixed protection 2016. Once a member is satisfied that they meet these conditions they can apply to HMRC for IP14.
"Relevant arrangement" and "relevant amount"
Paragraph 1(4) and (5) schedule 6 Finance Act 2014
A member has one or more relevant arrangements if on 5 April 2014 they are either or both:
- a member of one or more registered pension schemes
- a ‘relieved member’ of a ‘relieved non-UK pension scheme’
The relevant amount is the total value on 5 April 2014 of the member’s pension rights in all their relevant arrangements. An individual can have different types of pension rights and for IP 2014 these have been categorised as Amounts A, B, C and D.
How to apply for individual protection 2014
Regulations 4(2)(a) and 14 The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 - SI 2014/1842
Paragraph 1 Schedule 6 Finance Act 2014
To get IP14 the member will need to complete the online application. The online application must be received by HMRC by 5 April 2017.
Anyone can complete the online application and submit it on behalf of the member. This includes the member’s personal representatives where the member dies before 6 April 2017 and before applying for IP14.
Information that will need to be given when making an application for IP14
Regulation 4(1) The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 - SI 2014/1842
Applications for IP14 must be made using the online application. To complete the application correctly the following details must be completed:
- confirmation that the member doesn’t have primary protection,
- the value of their pension savings, broken down into Amounts A, B, C and D as appropriate,
- the date and amount of any pension debit to which their pension savings have become subject since 6 April 2014 and before the application is made, and the amount of the discounted pension debit (that is, the amount by which their relevant amount is actually reduced)
- their full name and address
- their date of birth
- their National Insurance number (or if they don’t have a National Insurance number, the reasons for this)
- a completed declaration declaring that the information they have given is true and complete to the best of their knowledge and belief.
HMRC confirming receipt of an IP14 application
Regulation 5 The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 - SI 2014/1842
Once the application has been successfully submitted, the online system will confirm the member has IP14 and give details of the amount protected and a unique reference number. This information forms the member’s IP14 certificate and will be available for them to view via their online personal tax account. The online service allows the member to print out this information. The member will need to keep this information and give it to their pension scheme or schemes if they want to rely on this protection when they come to take their benefits.
Where the member’s IP14 is dormant because they have one of enhanced protection, fixed protection or fixed protection 2014 the online system will show that the IP14 is held but is dormant. As these other protections are more favourable than IP14, the IP14 becomes active only if the member has lost the other form of protection and notified HMRC of this, as they are required to do.
Deadline for applying for IP14
Applications must be made to HMRC by 5 April 2017 at the latest.
HMRC refusal to accept an application for IP14
Regulation 6 The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 - SI 2014/1842
HMRC may refuse to accept an application if:
- it is not made on the online application,
- all the information required has not been provided,
- the application was made to HMRC after 5 April 2017.
Appeal against HMRC's refusal to accept an application
Regulations 6(2) and 7 The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 - SI 2014/1842
Where HMRC refuse to accept their application and have not already explained why, the member can require HMRC to give the reasons for their refusal. The member may also appeal against the decision not to accept the application. The member must tell HMRC that they want to appeal against that decision within 30 days of the day when HMRC gave their decision to refuse to accept their application.
Where the appeal is considered by the tribunal, the tribunal will decide whether HMRC was entitled to take the view that:
- the notice that was given did not satisfy the notification requirements,
- the notice did not contain the required information,
- the application was not made using the online application,
- the application was not received by HMRC on or before 5 April 2017.
If the tribunal finds that HMRC should have accepted the notice then they may direct them to issue an IP14 certificate. If HMRC’s decision is upheld then the member will either have to make a fresh application before 5 April 2017 or, if the decision is that the form was not received before that date, the member will not be entitled to IP14.
Incorrect information provided on the application
Regulations 8 and 10 The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 - SI 2014/1842
Where it is realised that either the information on the online application or any information given to HMRC in connection with the application is incorrect or becomes incorrect later then HMRC must be provided with the correct information without undue delay.
If this information isn’t provided, then the member may be liable to penalties.
If HMRC has already issued the IP14 ‘certificate’, the details held on the member’s personal tax account will be updated and a new unique reference number will be issued. This will constitute a ‘replacement certificate’ superseding the first ‘certificate’.
For amendments for members who held a paper certificate, prior to the launch of the online service, HMRC will cancel the existing paper certificate and amend the protection details online. The member will then be issued with a new unique reference number. The member will be able to view these details online through their personal tax account.
Replacement and duplicate certificates
Regulation 10 The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 - SI 2014/1842
HMRC may issue a ‘replacement certificate’, with a separate unique reference number, if they have reason to believe that:
- they have received incorrect information on the online application or in connection with the application,
- the information given has since become incorrect,
- the rights under the member’s arrangement have become subject to a pension debit.
If the original certificate has been mislaid HMRC can issue a duplicate certificate if they think it appropriate to do so.
Late applications
Guidance relating to late applications can be found at PTM176600.
When HMRC may revoke a certificate
Regulations 11 and 12 The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 - SI 2014/1842
HMRC may revoke a certificate if:
- they have reason to believe that that the member was not entitled to IP14 because they did not satisfy one or more of conditions,
- they have reason to believe that the relevant amount has been reduced below £1,250,000 million by a pension debit.
The member’s IP14 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 schedule 36 Finance Act 2014 relating to the member and IP14.
If HMRC revokes a member’s IP14 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 this decision and they must do this within 30 days of revocation.
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 an IP14 certificate.
If the appeal is refused then the certificate remains either replaced or revoked. A member’s IP14 will be based on the replacement certificate or, if the certificate was revoked, they will have lost their IP14 from the date of revocation. Any benefits taken after the certificate has been replaced or revoked will be tested against the member’s replacement protected lifetime allowance or the standard lifetime allowance if their certificate has been revoked. But any benefits taken after 5 April 2014, whilst their IP14 was set at a higher level and was valid, will not be retested.
Actions following a member's divorce where their pension rights have become subject to a pension debit
Regulations 2, 9, 10 and 11 The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 - SI 2014/1842
Paragraph 1(6) and (9) schedule 6 Finance Act 2014
Where a member’s pension rights are subject to a pension debit, their protected allowances may be reduced or, if their pension rights are reduced to an amount less than their allowances in force when the pension sharing order or provision takes effect, cease to apply altogether.
If, at any time after HMRC have issued a member with an IP14 certificate, their pension rights become subject to a pension debit, a member must inform HMRC about this within 60 days of the date of the pension debit.
The date of a pension debit is the date on which the notice of discharge of liability is issued under regulation 8(1) of the Pensions on Divorce etc. (Provision of Information) Regulations 2000 - SI 2000/1048.
HMRC must be given the following information:
- the date of the pension debit,
- the amount of the pension debit,
- the net amount of the pension debit taking into account any required reduction to it.
HMRC will, if appropriate, either:
- issue a replacement certificate, which will supersede the first certificate,
- revoke the certificate if the value of a member’s pension rights following the debit has fallen below their allowances.
Any relevant benefit crystallisation events that occurred before the effective date of the pension sharing order or provision, that is while the IP14 was still valid, will be unaffected by the replacement or revocation of the member’s certificate.
If a member does not provide this information they may be liable to penalties.
Documents relating to an IP14 application that need to be kept
Regulation 13 The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 - SI 2014/1842
The member must keep their IP14 ‘certificate’ issued by HMRC until no further relevant benefit crystallisation events can occur in respect of their pension savings or until such time as their certificate may be either replaced or revoked.
Copies of the valuation of their pension benefits should not be submitted with the online application. However, the member must keep all documents relating to the calculation of their relevant amount and Amounts A, B, C and D for 6 years from the day on which the application is made to HMRC.
HMRC reviews the information provided on the online application
Paragraph 1 Schedule 36 Finance 2008
Once a successful application for IP14 has been made online, HMRC can review any information given on the online application or in connection with the application for the purposes of checking the member’s tax position. HMRC can call for any information or document by notice in writing where this is reasonably required to allow them to check their tax position.
Fraudulent or negligent information provided in connection with the notification
Section 98(2) Taxes Management Act 1970
A member may be liable to a penalty if they:
- fraudulently or negligently provide false information in connection with any notification (including an enquiry into a notification),
- produce or make available an incorrect document to HMRC in connection with any notification (including an enquiry into a notification).
A penalty will be due if as a result of the incorrect information, document or certificate the IP14 relevant amount is less than the amount notified to HMRC.