787RA Credit for tax paid on an excess lump sum.

(1) Where, on or after 1 January 2011, a benefit crystallisation event that gives rise to a chargeable excess in accordance with section 787Q occurs in relation to an individual in respect of a relevant pension arrangement ^[2]>(including, where the provisions of section 787R(2A) apply, an individual who is a relevant member of a relevant pension arrangement)^<[2], then, in so far as income tax has been charged under subsection (3)(a)(i) or (3)(b)(i)(I) of section 790AA on an excess lump sum (within the meaning of subsection (1)(e) of that section) in respect of a lump sum paid, on or after that date, to the individual—

(a) by the administrator of that relevant pension arrangement (in this section referred to as the “first-mentioned administrator”), whether under that relevant pension arrangement, or under any other relevant pension arrangement administered by the first-mentioned administrator, or

(b) where the condition in subsection (2) is met, by the administrator of another relevant pension arrangement,

the income tax on the chargeable excess ^[3]>or the relevant individual’s appropriate share of that tax, as the case may be,^<[3] charged in accordance with section 787R (in this section referred to as the “chargeable excess tax”) shall be reduced by the aggregate of the amount of income tax charged under subsection (3)(a)(i) or (3)(b)(i)(I) of section 790AA on the excess lump sum and deducted by the first-mentioned administrator and the amount of such income tax charged on the excess lump sum and deducted by the other administrator (in this section referred to as the “lump sum tax”).

(2) The condition referred to in subsection (1)(b) is that the first-mentioned administrator obtains from the other administrator a certificate stating—

(a) the name and address of the administrator,

(b) the individual’s full name, address and PPS Number,

(c) the relevant pension arrangement in respect of which the benefit crystallisation event giving rise to the excess lump sum arose,

(d) the date of payment of the lump sum in respect of which tax on the excess lump sum was deducted under section 790AA and the amount of the lump sum, and

(e) the amount of the lump sum tax in respect of the excess lump sum charged to tax in accordance with subsection (3)(a)(i) or (3)(b)(i)(I) of section 790AA and deducted by, and remitted to the Collector-General by the administrator in accordance with subsection (8) of that section.

(3) Subject to subsection (4), where the lump sum tax referred to in subsection (1) is greater than the chargeable excess tax ^[4]>or the appropriate share of that tax, as the case may be,^<[4] referred to in that subsection, the amount by which the lump sum tax exceeds the chargeable excess tax ^[4]>or the appropriate share of that tax, as the case may be,^<[4] may be carried forward and aggregated with the lump sum tax on a lump sum (if any) paid to the individual under the next benefit crystallisation event that occurs in relation to that individual (in this section referred to as the “tax balance”) and, so far as may be, used to reduce the amount of the chargeable excess tax ^[4]>or the appropriate share of that tax, as the case may be,^<[4] arising on that benefit crystallisation event (in this section referred to as the “future chargeable excess tax”) and so on in respect of each successive benefit crystallisation event until the tax balance is fully used.

(4) Where a future chargeable excess tax referred to in subsection (3) is in respect of a benefit crystallisation event under a relevant pension arrangement which is not administered by the first-mentioned administrator and the tax balance has not been fully used, the administrator of that relevant pension arrangement shall obtain from the first-mentioned administrator a certificate stating—

(a) the name and address of the first-mentioned administrator,

(b) the individual’s full name, address and PPS Number, and

(c) the amount of the unused tax balance.

(5) Where an administrator receives a certificate referred to in subsection (4), the future chargeable excess tax may be reduced by the aggregate of the amount of the unused tax balance referred to in that certificate and the lump sum tax, if any, charged by that administrator in respect of the benefit crystallisation event giving rise to the future chargeable excess tax.

(6) Subsections (4) and (5) shall apply as appropriate, and with any necessary modifications, on each successive occasion on which a benefit crystallisation event occurs in relation to the individual where the administrator of that benefit crystallisation event and the administrator of the immediately preceding benefit crystallisation event are not the same person.

(7) Subsection (6) of section 787R shall, with any necessary modifications, apply to an administrator who obtains a certificate under subsection (2) or (4) as if the reference in that subsection (6) to a declaration, or declarations were a reference to a certificate, or certificates, to which subsection (2) or (4) applies.

(8) Any lump sum tax or tax balance referred to in this section—

(a) shall be used only once to reduce a chargeable excess tax ^[5]>or the appropriate share of that tax, as the case may be^<[5], and

(b) shall be used for no other purpose.

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(9) Where the provisions of section 787R(2A) apply, this section shall, with any necessary modifications, apply to the non-member in respect of the non-member’s appropriate share of the chargeable excess tax.

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