Finance (No. 2) Bill (HC Bill 190)

Amount D (uncrystallised rights at end of 5 April 2014 under relieved non-UK pension
schemes)

5 (1) To determine amount D—

(a) identify each relieved non-UK pension scheme of which the
5individual is a relieved member at the end of 5 April 2014, and

(b) in relation to each such scheme—

(i) assume that a benefit crystallisation event occurs in relation
to the individual at the end of 5 April 2014, and

(ii) in accordance with paragraph 14 of Schedule 34 to FA 2004,
10determine what the untested portion of the relevant relieved
amount would be immediately before the assumed benefit
crystallisation event.

(2) Amount D is the sum of the untested portions determined under sub-
paragraph (1)(b)(ii).

15Interpretation

6 (1) Expressions used in this Part of this Schedule and Part 4 of FA 2004 have the
same meaning in this Part as in that Part.

(2) In particular, references to a relieved non-UK pension scheme or a relieved
member of such a scheme are to be read in accordance with paragraphs 13(3)
20and (4) and 18 of Schedule 34 to FA 2004.

Part 2 Regulations

7 (1) The Commissioners for Her Majesty’s Revenue and Customs may by
regulations amend Part 1 of this Schedule.

(2) 25Regulations under this paragraph may (for example) add to the cases in
which paragraph 1(2) is to apply.

(3) Regulations under this paragraph must not increase any person’s liability to
tax.

(4) Regulations under this paragraph may include provision having effect in
30relation to a time before the regulations are made; but the time must be no
earlier than 6 April 2014.

8 (1) The Commissioners for Her Majesty’s Revenue and Customs may by
regulations make provision specifying how any notice required to be given
to an officer of Revenue and Customs under Part 1 of this Schedule is to be
35given.

(2) In sub-paragraph (1) the reference to Part 1 of this Schedule is to that Part as
amended from time to time by regulations under paragraph 7.

9 (1) Regulations under paragraph 7 or 8 may include supplementary or
incidental provision.

(2) 40The powers to make regulations under paragraphs 7 and 8 are exercisable by
statutory instrument.

(3) A statutory instrument containing regulations under paragraph 7 or 8 is
subject to annulment in pursuance of a resolution of the House of Commons.

Part 3 Other provision

5Amendment of section 219(5A) of FA 2004

10 (1) In section 219 of FA 2004 (availability of individual’s lifetime allowance) in
subsection (5A) after “effect” insert “where the previous benefit
crystallisation event occurred before 6 April 2014”.

(2) The amendment made by this paragraph is treated as having come into force
10on 6 April 2014.

Amendment of section 98 of TMA 1970

11 (1) Column 2 of the Table at the end of section 98 of TMA 1970 (special returns:
penalties) is amended as follows.

(2) After the entry for section 228 of TIOPA 2010 insert—

“(None) 15Regulations under paragraph 16 of Schedule 18 to the
Finance Act 2011.”

(3) After the entry for regulations under section 61(5) of FA 2012 insert—

“(None) Regulations under paragraph 3 of Schedule 22 to the
Finance Act 2013.

(None) 20Regulations under paragraph 8 of Schedule 4 to the Finance
Act 2014.”

Section 43

SCHEDULE 5 Pension schemes

Introduction

1 25Part 4 of FA 2004 (pension schemes etc) is amended as follows.

Registration of pension schemes

2 (1) Section 153 (applications for registration) is amended as follows.

(2) In subsection (4) for “On” substitute “Following”.

(3) In subsection (5) for paragraphs (a) and (b) substitute—

“(a) 30any information falling within subsection (5A) is inaccurate
in a material respect,

(b) any document falling within subsection (5B) contains a
material inaccuracy,

(c) any declaration accompanying the application is false,

(d) 35the scheme administrator has failed to comply with an
information notice under section 153A given in connection

with the application (including any declaration
accompanying it),

(e) the scheme administrator has deliberately obstructed an
officer of Revenue and Customs in the course of an inspection
under section 153B carried out in connection with the
5application (including any declaration accompanying it)
where the inspection has been approved by the tribunal,

(f) the pension scheme has not been established, or is not being
maintained, wholly or mainly for the purpose of making
payments falling within section 164(1)(a) or (b) (authorised
10payments of pensions and lump sums), or

(g) the person who is, or any of the persons who are, the scheme
administrator is not a fit and proper person to be, as the case
may be—

(i) the scheme administrator, or

(ii) 15one of the persons who are the scheme
administrator.”

(4) After subsection (5) insert—

“(5A) The information falling within this subsection is any information—

(a) contained in the application, or

(b) 20otherwise provided to an officer of Revenue and Customs by
the scheme administrator (whether under section 153A or
otherwise) in connection with the application (including any
declaration accompanying it).

(5B) The documents falling within this subsection are any documents
25produced to an officer of Revenue and Customs by the scheme
administrator (whether under section 153A or otherwise) in
connection with the application (including any declaration
accompanying it).

(5C) The reference in subsection (5)(d) to the scheme administrator
30having failed to comply with an information notice under section
153A includes a case where the scheme administrator has concealed,
destroyed or otherwise disposed of, or has arranged for the
concealment, destruction or disposal of, a document in breach of
paragraph 42 or 43 of Schedule 36 to the Finance Act 2008 as applied
35by section 153A(3).”

3 After section 153 insert—

“153A Power to require information or documents in relation to applications
for registration

(1) This section applies where an application for a pension scheme to be
40registered is made.

(2) An officer of Revenue and Customs may by notice (an “information
notice”) require the scheme administrator or any other person—

(a) to provide the officer with any information, or

(b) to produce a document to the officer,

45if the officer reasonably requires the information or document in
connection with the application (including any declaration
accompanying it).

(3) Paragraphs 6(2), 7, 8, 15, 16, 18 to 20, 23 to 27, 42 and 43 of Schedule
36 to the Finance Act 2008 (information notices etc) apply in relation
to information notices under this section as they apply in relation to
information notices under that Schedule.

(4) 5Where an information notice under this section is given to a person
other than the scheme administrator, an officer of Revenue and
Customs must give a copy of the notice to the scheme administrator.

(5) A person, other than the scheme administrator, who is given an
information notice under this section may appeal against the notice
10or any requirement in the notice.

(6) Paragraph 32 of Schedule 36 to the Finance Act 2008 (procedures for
appeals against information notices) applies for the purposes of an
appeal under subsection (5) as it applies for the purposes of an
appeal under Part 5 of that Schedule.

153B 15 Power to inspect documents in relation to applications for registration

(1) This section applies where an application for a pension scheme to be
registered is made.

(2) An officer of Revenue and Customs may—

(a) enter any business premises of the scheme administrator or
20any other person, and

(b) inspect documents that are on the premises,

if the officer reasonably requires to inspect the documents in
connection with the application (including any declaration
accompanying it).

(3) 25In subsection (2)(a) “business premises” has the meaning given by
paragraph 10(3) of Schedule 36 to the Finance Act 2008 (power to
inspect business premises etc).

(4) Paragraphs 10(2), 12, 15 and 16 of Schedule 36 to the Finance Act 2008
apply in relation to the power of inspection conferred by this section
30as they apply in relation to the power of inspection conferred by
paragraph 10 of that Schedule.

(5) An officer of Revenue and Customs may not inspect a document
under this section if or to the extent that, by virtue of a provision of
Part 4 of Schedule 36 to the Finance Act 2008 (restrictions on powers)
35applied by section 153A(3), an information notice under section 153A
given at the time of the inspection to the occupier of the premises
could not require the occupier to produce the document.

(6) An officer of Revenue and Customs may ask the tribunal to approve
an inspection under this section.

(7) 40Paragraph 13(1A), (2) and (3) of Schedule 36 to the Finance Act 2008
(approval of tribunal for inspections) applies in relation to an
application under subsection (6) as it applies in relation to an
application under paragraph 13 of that Schedule in relation to an
inspection under paragraph 10 of that Schedule.

153C Penalties for failure to comply with information notices etc

(1) This section applies where a person other than the scheme
administrator—

(a) fails to comply with an information notice under section
5153A, or

(b) deliberately obstructs an officer of Revenue and Customs in
the course of an inspection under section 153B that has been
approved by the tribunal.

(2) The reference in subsection (1)(a) to a person who fails to comply
10with an information notice includes a person who conceals, destroys
or otherwise disposes of, or arranges for the concealment,
destruction or disposal of, a document in breach of paragraph 42 or
43 of Schedule 36 to the Finance Act 2008 as applied by section
153A(3).

(3) 15Paragraphs 39(2), 40 and 44 to 49 of Schedule 36 to the Finance Act
2008 (penalties for failure to comply with information notice etc)
apply in relation to the failure or obstruction as they apply in relation
to a failure or obstruction mentioned in paragraph 39(1) of that
Schedule.

153D 20 Penalties for inaccurate information in applications

(1) This section applies where—

(a) an application under section 153 contains information which
is inaccurate,

(b) the inaccuracy is material, and

(c) 25condition A, B or C is met.

(2) Condition A is that the inaccuracy is careless or deliberate.

(3) An inaccuracy is careless if it is due to a failure by the scheme
administrator to take reasonable care.

(4) Condition B is that the scheme administrator knows of the
30inaccuracy at the time the application is made but does not inform an
officer of Revenue and Customs at that time.

(5) Condition C is that the scheme administrator—

(a) discovers the inaccuracy some time later, and

(b) fails to take reasonable steps to inform an officer of Revenue
35and Customs.

(6) The scheme administrator is liable to a penalty not exceeding the
maximum penalty for which the scheme administrator could have
been liable under paragraph 40A of Schedule 36 to the Finance Act
2008 (penalties for inaccurate information and documents) had that
40paragraph applied in relation to the inaccuracy.

(7) Where the information contains more than one material inaccuracy,
a penalty is payable for each inaccuracy.

(8) Paragraphs 46 to 49 of Schedule 36 to the Finance Act 2008
(assessment of penalties etc) apply in relation to a penalty under this
45section as they apply in relation to a penalty under paragraph 40A of
that Schedule.

153E Penalties for inaccurate information or documents provided under
information notice

(1) This section applies where—

(a) in complying with an information notice under section 153A,
5a person provides inaccurate information or produces a
document that contains an inaccuracy, and

(b) the inaccuracy is material.

(2) Paragraphs 40A and 46 to 49 of Schedule 36 to the Finance Act 2008
(penalties for inaccurate information and documents) apply in
10relation to the inaccuracy as they apply in relation to an inaccuracy
connected with an information notice under that Schedule.

153F Penalties for false declarations

(1) This section applies where—

(a) a declaration accompanying an application under section 153
15is false, and

(b) at least one of conditions A to C in section 153D is met
(reading references to an inaccuracy as references to a
falsehood and references to the scheme administrator as
references to the person who made the declaration).

(2) 20The person who made the declaration is liable to a penalty not
exceeding the maximum penalty for which the person could have
been liable under paragraph 40A of Schedule 36 to the Finance Act
2008 (penalties for inaccurate information and documents) had that
paragraph applied in relation to the falsehood.

(3) 25Where the declaration contains more than one falsehood, a penalty is
payable in relation to each falsehood.

(4) Paragraphs 46 to 49 of Schedule 36 to the Finance Act 2008
(assessment of penalties etc) apply in relation to a penalty under this
section as they apply in relation to a penalty under paragraph 40A of
30that Schedule.”

4 After section 156 insert—

“156A Cases where application for registration not decided within 6 months

(1) This section applies where—

(a) an application for a pension scheme to be registered is made,
35but

(b) the scheme administrator is not notified under section 153(6)
within the period of 6 months after the day on which the
application is made.

(2) The scheme administrator may appeal to the tribunal as if, at the end
40of that period of 6 months, the scheme administrator had been
notified under section 153(6) of a decision not to register the scheme;
and section 156(5) to (8) applies accordingly.”

5 (1) The amendments made by paragraphs 2 to 4 are treated as having come into
force on 20 March 2014 and have effect in relation to applications made on
45or after that date.

(2) In relation to an application made before 1 September 2014, section 153(5) of
FA 2004 (as amended by paragraph 2(3)) has effect with the omission of
paragraph (g).

De-registration of pension schemes

6 (1) 5Section 158 (grounds for de-registration) is amended as follows.

(2) In subsection (1)—

(a) before paragraph (a) insert—

“(za) that the pension scheme has not been established, or
is not being maintained, wholly or mainly for the
10purpose of making payments falling within section
164(1)(a) or (b) (authorised payments of pensions and
lump sums),”,

(b) in paragraph (d) for “incorrect” substitute “inaccurate”,

(c) after paragraph (d) insert—

“(da) 15that the scheme administrator fails to produce any
document required to be produced to an officer of
Revenue and Customs by virtue of this Part or Part 1
of Schedule 36 to the Finance Act 2008,

(db) that any document produced to an officer of Revenue
20and Customs by the scheme administrator contains a
material inaccuracy in relation to which at least one of
conditions A to C in subsections (7) to (10) is met,”,
and”

(d) for paragraph (e) substitute—

“(e) 25that any declaration accompanying the application to
register the pension scheme, or otherwise made to an
officer of Revenue and Customs in connection with
the pension scheme, is false in a material particular,

(ea) the scheme administrator has deliberately obstructed
30an officer of Revenue and Customs in the course of an
inspection under Part 2 of Schedule 36 to the Finance
Act 2008 that has been approved by the tribunal, or”.

(3) In subsection (1) (as amended by sub-paragraph (2) above)—

(a) after paragraph (za) insert—

“(zb) 35that the person who is, or any of the persons who are,
the scheme administrator is not a fit and proper
person to be, as the case may be—

(i) the scheme administrator, or

(ii) one of the persons who are the scheme
40administrator,”, and

(b) in paragraph (ea) after “under” insert “section 159B or”.

(4) After subsection (5) insert—

“(6) Subsections (7) to (10) apply for the purposes of subsection (1)(db).

(7) Condition A is that the inaccuracy is careless or deliberate.

(8) 45An inaccuracy is careless if it is due to a failure by the scheme
administrator to take reasonable care.

(9) Condition B is that the scheme administrator knows of the
inaccuracy at the time the document is produced to an officer of
Revenue and Customs but does not inform such an officer at that
time.

(10) 5Condition C is that the scheme administrator—

(a) discovers the inaccuracy some time later, and

(b) fails to take reasonable steps to inform an officer of Revenue
and Customs.”

7 In Chapter 2, after section 159 insert—

“159A 10 Power to require information or documents for purpose of
considering if scheme administrator is fit and proper

(1) An officer of Revenue and Customs may by notice (an “information
notice”) require the scheme administrator of a registered pension
scheme or any other person—

(a) 15to provide the officer with any information, or

(b) to produce a document to the officer,

if the officer reasonably requires the information or document for the
purpose of considering whether the person who is, or any of the
persons who are, the scheme administrator is a fit and proper person
20to be the scheme administrator or one of those persons (as the case
may be).

(2) Paragraphs 6(2), 7, 8, 15, 16, 18 to 20, 23 to 27, 42 and 43 of Schedule
36 to the Finance Act 2008 (information notices etc) apply in relation
to information notices under this section as they apply in relation to
25information notices under that Schedule.

(3) Where an information notice under this section is given to a person
other than the scheme administrator, an officer of Revenue and
Customs must give a copy of the notice to the scheme administrator.

(4) A person who is given an information notice under this section may
30appeal against the notice or any requirement in the notice.

(5) Paragraph 32 of Schedule 36 to the Finance Act 2008 (procedures for
appeals against information notices) applies for the purposes of an
appeal under subsection (4) as it applies for the purposes of an
appeal under Part 5 of that Schedule.

159B 35 Power to inspect documents for purpose of considering if scheme
administrator is fit and proper

(1) An officer of Revenue and Customs may—

(a) enter any business premises of the scheme administrator of a
registered pension scheme or of any other person, and

(b) 40inspect documents that are on the premises,

if the officer reasonably requires to inspect the documents for the
purpose of considering whether the person who is, or any of the
persons who are, the scheme administrator is a fit and proper person
to be the scheme administrator or one of those persons (as the case
45may be).

(2) In subsection (1)(a) “business premises” has the meaning given by
paragraph 10(3) of Schedule 36 to the Finance Act 2008 (power to
inspect business premises etc).

(3) Paragraphs 10(2), 12, 15 and 16 of Schedule 36 to the Finance Act 2008
5apply in relation to the power of inspection conferred by this section
as they apply in relation to the power of inspection conferred by
paragraph 10 of that Schedule.

(4) An officer of Revenue and Customs may not inspect a document
under this section if or to the extent that, by virtue of a provision of
10Part 4 of Schedule 36 to the Finance Act 2008 (restrictions on powers)
applied by section 159A(2), an information notice under section 159A
given at the time of the inspection to the occupier of the premises
could not require the occupier to produce the document.

(5) An officer of Revenue and Customs may ask the tribunal to approve
15an inspection under this section.

(6) Paragraph 13(1A), (2) and (3) of Schedule 36 to the Finance Act 2008
(approval of tribunal for inspections) applies in relation to an
application under subsection (5) as it applies in relation to an
application under paragraph 13 of that Schedule in relation to an
20inspection under paragraph 10 of that Schedule.

159C Penalties for failure to comply with information notices etc

(1) This section applies where a person—

(a) fails to comply with an information notice under section
159A, or

(b) 25deliberately obstructs an officer of Revenue and Customs in
the course of an inspection under section 159B that has been
approved by the tribunal.

(2) The reference in subsection (1)(a) to a person who fails to comply
with an information notice includes a person who conceals, destroys
30or otherwise disposes of, or arranges for the concealment,
destruction or disposal of, a document in breach of paragraph 42 or
43 of Schedule 36 to the Finance Act 2008 as applied by section
159A(2).

(3) Paragraphs 39(2), 40 and 44 to 49 of Schedule 36 to the Finance Act
352008 (penalties for failure to comply with information notice etc)
apply in relation to the failure or obstruction as they apply in relation
to a failure or obstruction mentioned in paragraph 39(1) of that
Schedule.

159D Penalties for inaccurate information or documents provided under
40information notice

(1) This section applies where—

(a) in complying with an information notice under section 159A,
a person provides inaccurate information or produces a
document that contains an inaccuracy, and

(b) 45the inaccuracy is material.

(2) Paragraphs 40A and 46 to 49 of Schedule 36 to the Finance Act 2008
(penalties for inaccurate information and documents) apply in

relation to the inaccuracy as they apply in relation to an inaccuracy
connected with an information notice under that Schedule.”

8 (1) The amendments made by paragraphs 6 and 7 have effect in relation to
pension schemes whenever registered (including schemes registered by
virtue of paragraph 1 of Schedule 36 to FA 2004 (deemed registration of
5existing schemes)).

(2) The amendments made by paragraph 6(2) and (4) are treated as having come
into force on 20 March 2014.

(3) The amendments made by paragraphs 6(3) and 7 come into force on 1
September 2014 or, if later, the day after the day on which this Act is passed.

10Declarations required from person who is to be a scheme administrator

9 (1) In section 270 (meaning of “scheme administrator”) in subsection (2)—

(a) after paragraph (a) omit “and”, and

(b) after paragraph (b) insert “, and

“(c) has made to an officer of Revenue and Customs any
15other declarations which are reasonably required by
Her Majesty’s Revenue and Customs”.

(2) The amendments made by this paragraph have effect in relation to
appointments on or after 1 September 2014.

Payments by registered pension schemes: surrender

10 (1) 20Section 172A (payments by registered pension schemes: surrender) is
amended as follows.

(2) In subsection (5) omit paragraph (d).

(3) After subsection (5) insert—

“(5A) Subsection (5)(b) applies only if the entitlement is held (or is to be
25held) by the dependant under an arrangement under the pension
scheme relating to the member or dependant.”

11 In section 207 (authorised surplus payments charge) after subsection (6)
insert—

“(6A) Subsection (1) does not apply to an authorised surplus payment to
30the extent that the payment is funded (directly or indirectly) by a
surrender of (or an agreement to surrender) benefits or rights which
results in the registered pension scheme being treated as making an
unauthorised payment under section 172A.

(6B) Terms used in subsection (6A) which are defined in section 172A
35have the same meaning as they have in that section.”

12 The amendments made by paragraphs 10 and 11 have effect in relation to
surrenders (or agreements to surrender) made on or after 20 March 2014.

Orders for money etc to be restored to pension schemes

13 (1) Section 188 (relief for members’ contributions) is amended as follows.

(2) 40In subsection (2) after “(3)” insert “or (3A)”.