Effect of tax rules FPS 2006 has to comply with rules set by HM Revenue and Customs. There are, for example, limits on the amount of pension and lump sum which can be taken by a pension scheme member before tax charges apply. The two main limits on your benefits are the annual allowance and the lifetime allowance. The growth in the value of your pension each year must be compared with an annual limit set by HM Treasury. If the value exceeds the limit, tax would be due, payable through self-assessment. Or you could elect that the fire and rescue authority should make the payment on your behalf and collect the sum due from your benefit entitlement (this is referred to as the "scheme pays" method). When benefits are due the total value must be tested against the lifetime allowance, also set annually. If the value exceeds the limit, tax would be deducted by the fire and rescue authority and paid over to HM Revenue and Customs. The testing of the value of benefits is in respect of all pension benefits you may have accrued, including from arrangements other than FPS 2006. Consequently the fire and rescue authority will ask you to provide statements in respect of any other pension arrangement you may have so that they can check the total value of benefits before making payment from the Scheme. The authority can give you more details of the way in which tax rules work, how benefits are valued, current limits and the tax chargeable.