This note is provided for the Department of Justice (DoJ) as the responsible authority for the police pension schemes in Northern Ireland and relates to the 2006 scheme.

This guidance covers the calculation formulae and factors to use to determine the debit to apply to a member's pension and lump sum once it has been determined that a tax charge will be paid from the 2006 scheme. Please follow legislation, HMRC guidance and any additional guidance issued by DoJ when determining the amount of any tax charge that will be paid from the 2006 scheme.

This note does not attempt to describe the method for determining the amount of any annual allowance charge. Any references in this note to the calculation of the annual allowance charge are included solely to help explain how the charge should be converted to a reduction to the member's benefits. They should not be treated as guidance on how to calculate the annual allowance charge.

The tax charges covered by this guidance are in relation to the annual allowance. Relevant legislation in respect of the annual allowance is contained in the Finance Act 2004 (as amended).

This note only relates to benefits in the 2006 section of the scheme. Separate guidance has been issued in respect of the 1988 and 2015 schemes

The following changes have been made when reviewing this guidance:

• Important information around the expected audience for the guidance, use of the guidance, review of factors, compliance and limitations applies across all sets of guidance. Rather than being repeated in each set of guidance, this can now be found on the scheme home page. It is important to read this information alongside the guidance.
• Calculation methodology: No changes have been made to the calculation methodology.
• Examples: There are no examples in this guidance. Worked examples, using the calculation methodology, can be found in prior versions of the guidance (though please note that these use historic factors).
• Factor tables: The "Factor Tables" tab contains the names of the tables that are referenced in the calculation methodology. The tables of factors themselves can be found in the most recently published "Consolidated Factors Workbook" which is available by clicking the "Download current Consolidated Factors Workbook" button on the scheme's home page.
• Assumptions: The key assumptions underlying the factors in each note are contained in the Consolidated Factors Workbook.
• Regulations: The regulations that require the production of the actuarial factors and/or guidance that is the subject of this note are summarised in the "Regulations" tab.

As a result of McCloud remedy, some members may have a new or revised annual allowance tax charge for one of the years during the remedy period (2015 - 2022) which may be determined/notified to the scheme after the date of publication of this guidance. This guidance is not to be used to determine debits in relation to any such charges, please refer to the separate guidance on scheme pays for McCloud eligible members for the correct approach.