Payment of Serious Ill Health Lump

General

Please could anyone advise whether a Serious Ill Health Lump Sum(SIHLS) payment is permissable from uncrystallised funds where the investor/client is in partial USP?

Would the answer depend on the structure of the scheme ie as to whether the USP is deemed to be in a separate arrangement to the uncrystallised funds?

So if the SIPP is created with one uncrystallised arrangement, and subsequently new arrangements are created to 'house' the USP(so the SIPP now has mutliple arrangements, one uncrystallised and possibly multiple crystallised), would a SIHLS be allowable from the uncrystallised arrangement?

Where a SIPP is created with mutiple uncrystallised arrangements and subsequently whole arrangements are crystallised into USP, leaving some whole arrangements uncrystallised, then the uncrystallised arrangements can be paid out as a SIHLS?

thanks

It depends on the

Submitted by michaelsmith on Fri, 2010-01-22 14:49.

It depends on the 'arrangement' structure for FA04 purposes of you SIPP/SSAS. The rules work at 'arrangement' level - it has to be wholly uncrystallised for a SIH lump sum to be paid. This should be in your Rules / T&Cs. Pre A-Day SIPPs tended to be split into lots of seperate arrangements, so you could phase benefits in. Post A-Day, you don't need to do this, and can phase easily within single arrangements (and in fact needs to be to ensure don't get different review / pension year dates). Schemes may have different structures for Pre A-Day and Post A-Day vested members.

Michael AMPS Committee

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