Annual allowance charge: "scheme pays" mechanism | Practical Law

Annual allowance charge: "scheme pays" mechanism | Practical Law

This note examines the "scheme pays" mechanism for paying an annual allowance charge, introduced by the Finance Act 2011. In certain circumstances, a member who incurs an annual allowance charge can ask their scheme to pay the charge on their behalf and make a corresponding adjustment to their scheme benefits. The note looks at the circumstances where "scheme pays" applies, the timings involved and how schemes usually go about adjusting benefits.

Annual allowance charge: "scheme pays" mechanism

Practical Law UK Practice Note 0-509-0854 (Approx. 16 pages)

Annual allowance charge: "scheme pays" mechanism

MaintainedUnited Kingdom
This note examines the "scheme pays" mechanism for paying an annual allowance charge, introduced by the Finance Act 2011. In certain circumstances, a member who incurs an annual allowance charge can ask their scheme to pay the charge on their behalf and make a corresponding adjustment to their scheme benefits. The note looks at the circumstances where "scheme pays" applies, the timings involved and how schemes usually go about adjusting benefits.