Pension commencement excess lump sum | Practical Law

Pension commencement excess lump sum | Practical Law

Pension commencement excess lump sum

Pension commencement excess lump sum

Practical Law UK Glossary w-042-6394 (Approx. 3 pages)

Glossary

Pension commencement excess lump sum

A lump sum that may be paid to an individual from a registered pension scheme when they start taking their benefits from the scheme. Introduced by the Finance Act 2024, a pension commencement excess lump sum (PCELS) allows an individual to take lump-sum benefits where they have exhausted their lump sum allowance and their lump sum and death benefit allowance, provided certain further conditions are met. Unlike a pension commencement lump sum, a PCELS is subject to income tax at the individual's marginal rate. (Paragraph 3C, Schedule 29, Finance Act 2004 and section 637B, Income Tax (Earnings and Pensions) Act 2003.)