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2016 protections

Fixed protection 2016

Fixed protection 2016 works in the same way as the previous two forms, except that it gives investors a protected allowance of £1.25m and is also not available to those holding fixed protection 2014.

Your clients will be able to apply for fixed protection from 6 April 2016. HMRC plans to launch a new online system for protection applications in the summer of 2016.

If your client needs to use fixed protection 2016 before the online system launches, they will need to write to HMRC (address at the bottom of the page) to apply for a temporary protection reference. They still need to apply for a permanent reference when the online system launches for any future benefit crystallisation events. If your client won’t have a benefit crystallisation event before the online system launches, they should not apply for a temporary reference.

HMRC has provided the following template for investors to use if they wish to apply for a temporary fixed protection 2016 reference:

“I wish to apply for Fixed Protection 2016 using the interim application process.

I confirm that I will be taking benefits before the new online system is available in July 2016 and I know that to ensure that my pension savings continue to be protected, I will need to apply for a permanent reference number from July 2016.

I enclose the following information for you to consider my interim Fixed Protection 2016 (FP2016) application.

[Title]
[Insert first name]
[Insert surname]
[Insert National Insurance number]
[Insert date of birth]
[Insert address]
[Email Address]

I understand that if I, my employer or a third party make further contributions to my scheme I must notify HMRC and that my FP2016 will be lost.

I also know if my pension scheme has benefit accrual, that in some circumstances FP2016 may be lost and that I am responsible for testing for benefit accrual. I understand my pension scheme administrator can help provide me with information to help me carry out the test.

I confirm that as at 5 April 2016 I had one or more arrangements under a registered pension scheme, or a relieved non-UK pension scheme of which I was a relieved member, and that at 6 April 2016 I did not hold any of the following protections:

• Primary Protection
• Enhanced Protection
• Fixed Protection
• Fixed Protection 2014

I confirm that I have not had a protection cessation event since 6 April 2016 that would mean I am not entitled to apply for Fixed Protection 2016.

The information that I have provided is true and complete to the best of my knowledge and belief.

[Signature]
[Date]”

Individual protection 2016

Individual protection is similar to the 2014 version, except that an investor’s protected allowance is based on the value of their pensions on 5 April 2016, up to a maximum of £1.25m. Those with pension values below £1m on that date aren’t eligible to apply.

Your clients will be able to apply for individual protection 2016 using the online system from the summer of 2016, or apply for a temporary reference from 6 April 2016.

HMRC has provided the following template for investors to use when applying for temporary individual protection 2016:

“I wish to apply for Individual Protection 2016 using the interim application process.

I confirm that I will be taking benefits before the new online system is available in July 2016 and I know that to ensure that my pension savings continue to be protected, I will need to apply for a permanent reference number from July 2016.

I enclose the following information for you to consider my interim Individual Protection 2016 application.

[Title]
[Insert first name]
[Insert surname]
[Insert National Insurance number]
[Insert date of birth]
[Insert address]
[Email Address]

 My total relevant amount is [insert value £] and is the sum of amounts A to D (A+B+C+D) below.

Amount A

The amount of my pensions in payment before 6 April 2006 was [insert value £], valued at 5 April 2016

Amount B

Between 6 April 2006 to 5 April 2016, I crystallised benefits to the value of [insert value £], valued at 5 April 2016.

Amount C

My uncrystallised pension savings in UK registered pension schemes were valued at 5 April 2016 at [insert value £].

Amount D

My uncrystallised pension savings in relieved non-UK pension schemes at 5 April 2016 were valued at [insert value £].

[Only complete the following if applicable]

Pension Debits

Since 6 April 2016 I have become subject to a relevant pension debit.

[Date of pension sharing order]

[Amount of pension sharing order debit]

[New relevant amount]

I confirm that at 5 April 2016 I had one or more arrangements under a registered pension scheme, or a relieved non-UK pension scheme of which I was a relieved member and that at 6 April 2016 I did not hold Primary Protection or Individual Protection 2014.

The information that I have provided is true and complete to the best of my knowledge and belief.

[Signature]
[Date]”

To apply for either form of temporary protection, your client will need to write to:

Pension Schemes Services
Fitzroy House
Castle Meadow Road
Nottingham
NG2 1BD.

Disclaimer

This information is intended for investment professionals and should not be relied upon by private customers or any other persons.