House of Commons Amendments

Session 2014 - 15
Internet Publications
Other Bills before Parliament

36

10  (1)
In paragraph 34(2) of Schedule 36 to FA 2004 (modifications required by

paragraph 31 in cases involving protected entitlements to lump sums)

the sub-paragraphs treated as substituted in paragraph 2 of Schedule 29

to FA 2004 are amended as follows.

      (2)
In the substituted sub-paragraph (7A), in the definition of AC, for

“(7AA) and (7B))” substitute “(7AA) to (7B))”.

      (3)
After the substituted sub-paragraph (7AA) insert—

“(7AB)
Where paragraph 1A applies to the lump sum, AC is the total

of—

(a)
the sums held, at the time the lump sum is paid, for the

purpose of providing the pension at that time expected

to be the pension in connection with which the lump

sum is paid, and

(b)
the market value at that time of the assets held at that

time for that purpose.

  (7AC)
Where paragraph 1B applies to the lump sum, AC is the total

of—

(a)
the sums held, at the time the lump sum is paid, for the

purpose of providing the expected pension (see

paragraph 1B(2)(b)), and

(b)
the market value at that time of the assets held at that

time for that purpose.”

Reporting obligations

11  (1)
In the Registered Pension Schemes (Provision of Information)

Regulations 2006 (S.I. 2006/567) after regulation 18 insert—

“Modified operation of these Regulations in the case of certain pre-6 April 2015 lump sums

19
Lump sums to which paragraph 1B of Schedule 29 applies

(1)
Regulations 3 to 18 have effect subject to the following provisions

of this regulation.

(2)
Paragraphs (3) to (8) apply if—

(a)
a lump sum is paid by a registered pension scheme (“the

paying scheme”) to a member of the scheme,

(b)
paragraph 1B of Schedule 29 applies to the lump sum,

and

(c)
the member’s becoming entitled to the actual pension

mentioned in paragraph 1B(2)(h) of Schedule 29 has the

effect that—

(i)
the member also becomes entitled to the lump

sum, and

(ii)
the member’s becoming entitled to the lump sum

is a benefit crystallisation event.

(3)
For the purposes of—

(a)
reportable event 6,

(b)
regulation 3 so far as applying by virtue of that event, and

37

(c)
obligations under regulation 14(1),


the benefit crystallisation event mentioned in paragraph (2)(c)(ii)

is treated as occurring—

(i)
in respect of the scheme to which the transfer mentioned

in paragraph 1B(2)(g) of Schedule 29 was made (“the

receiving scheme”) and not in respect of the paying

scheme, and

(ii)
when the member becomes entitled to the actual pension

or, if later, on 5 August 2014.

(4)
For the purposes of regulations 15(2)(a) and 17(5)(a)(i) and

(7)(a)(i), that benefit crystallisation event is treated as occurring

in respect of the receiving scheme and not in respect of the

paying scheme.

(5)
For the purposes of—

(a)
reportable event 7 (but not its definition of “the

entitlement amount”),

(b)
reportable event 8, and

(c)
regulation 3 so far as applying by virtue of either of those

events,


the lump sum is treated as having been paid—

(i)
by the receiving scheme and not by the paying scheme,

and

(ii)
when the member becomes entitled to the actual pension

or, if later, on 5 August 2014.

(6)
For the purposes of reportable event 7 “the entitlement amount”

is the total of—

(a)
the sums held, at the time the lump sum is actually paid,

for the purpose of providing the expected pension

mentioned in paragraph 1B(2)(b) of Schedule 29, and

(b)
the market value at that time of the assets held at that time

for that purpose.

(7)
The scheme administrator of the paying scheme is to provide the

scheme administrator of the receiving scheme with the following

information—

(a)
the date the lump sum was paid,

(b)
the amount of the lump sum,

(c)
the total of—

(i)
the sums held, at the time lump sum is paid, for

the purpose of providing the expected pension

mentioned in paragraph 1B(2)(b) of Schedule 29,

and

(ii)
the market value at that time of the assets held at

that time for that purpose, and

(d)
a statement that no further pension commencement lump

sum may be paid in connection with that expected

pension.

(8)
The scheme administrator of the paying scheme is to comply

with its obligations under paragraph (7) before—

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(a)
the end of 30 days beginning with the date of the transfer

mentioned in paragraph 1B(2)(g) of Schedule 29, or

(b)
if later, the end of 3 September 2014.

20
Lump sums to which paragraph 1B of Schedule 29 fails to apply

(1)
Regulations 3 to 18 have effect subject to the following provisions

of this regulation.

(2)
Paragraph (3) applies if—

(a)
a lump sum is paid by a registered pension scheme (“the

paying scheme”) to a member of the scheme,

(b)
paragraph 1B of Schedule 29 does not apply to the lump

sum, but the conditions in paragraph 1B(2)(a) to (g) are

met in the case of the lump sum, and

(c)
as at the end of 5 October 2015 it is the case that the lump

sum is to be taken as having been an unauthorised

member payment.

(3)
For the purposes of reportable event 1, and regulation 3 so far as

applying by virtue of that event, the lump sum is treated as

having been paid—

(a)
by the receiving scheme and not by the paying scheme,

and

(b)
on 6 October 2015.”

      (2)
The amendment made by sub-paragraph (1) is to be treated as having

been made by the Commissioners for Her Majesty’s Revenue and

Customs under such of the powers cited in the instrument containing the

Regulations as are applicable.

Scheme sanction charges

12  (1)
In section 239(3) of FA 2004 (cases where person other than scheme

administrator is liable for a scheme sanction charge)—

(a)
after “But” insert “—

(a)
”, and

(b)
at the end insert “, and

(b)
in the case of a payment of a lump sum to a

member where the conditions in paragraphs

1(1)(b) and (d) and 1B(2)(a) to (g) of Schedule 29

are met, the person liable to the scheme sanction

charge so far as relating to any part of the lump

sum within the permitted maximum is the

scheme administrator of the registered pension

scheme to which the transfer mentioned in

paragraph 1B(2)(g) of Schedule 29 is made.”

      (2)
In section 239 of FA 2004 (scheme sanction charges) after subsection (3)

insert—

“(3A)
For the purposes of subsection (3)(b) “the permitted maximum”,

in the case of a lump sum paid to an individual, is the amount

that in accordance with paragraph 2 of Schedule 29 would be the

permitted maximum for that lump sum if the individual became

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entitled at the time the lump sum is paid to the pension at that

time expected to be the pension in connection with which the

lump sum is paid.”

      (3)
In section 268 of FA 2004 (discharge of liability to scheme sanction

charges etc) after subsection (7) insert—

“(7A)
Subsection (7) applies with the omission of its paragraph (a) if the

scheme chargeable payment is a payment of a lump sum where

the conditions in paragraph 1B(2)(a) to (g) of Schedule 29 are

met.”

      (4)
In the Taxation of Pension Schemes (Transitional Provisions) Order 2006

(S.I. 2006/572) in article 18 (which provides for paragraph 1(1)(b) of

Schedule 29 to FA 2004 to be omitted in certain cases) at the end insert “,

and section 239 has effect in the case of a lump sum paid to that

individual as if its subsection (3)(b) did not include a reference to

paragraph 1(1)(b) of Schedule 29”.

      (5)
The amendment made by sub-paragraph (4) is to be treated as made by

the Treasury under the powers to make orders conferred by section

283(2) of FA 2004.

Power to make further adjustments

13
In section 166 of FA 2004 (payments by registered pension schemes: the

lump sum rule) after subsection (4) insert—

“(5)
The Commissioners for Her Majesty’s Revenue and Customs

may by regulations           amend Part 1 of Schedule 29, or Part 3 of

Schedule 36, in connection with cases involving a lump sum

within subsection (6).

(6)
A lump sum is within this subsection if—

(a)
the sum is paid on or after 19 September 2013 and before

6 April 2015, or

(b)
the sum is paid before 19 September 2013, a contract for a

lifetime annuity is entered into to provide the pension in

connection with which the sum is paid, and on or after 19

March 2014 the contract is cancelled.

(7)
The provision that may be made under subsection (5) includes

provision altering the effect of amendments made by the Finance

Act 2014.”

14
In section 282(1) and (2) of FA 2004 (making of regulations and orders)

for “Board of Inland Revenue” substitute “Commissioners for Her

Majesty’s Revenue and Customs”.

Commencement

15
The amendments made by paragraphs 1 to 5, 6(1), 7 to 10, 11(1) and 12(1)

to (4) of this Schedule are to be treated as having come into force on 19

March 2014.”

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Schedule 6
Page 273, line 29, at end insert—
“139A (1)
Section 94A of ITTOIA 2005 (costs of setting up SAYE option scheme or
CSOP scheme) is amended as follows.
      (2)
In subsection (1)—
(a)
in paragraph (a) omit “that is approved by an officer of Revenue
and Customs”, and
(b)
omit paragraph (b) and the “and” before it.
      (3)
In subsection (2)—
(a)
at the beginning of paragraph (a) insert “Schedule 3”,
(b)
at the beginning of paragraph (b) insert “Schedule 4”, and
(c)
omit the final sentence.
      (4)
In subsection (4) for “approval is given” (in both places) substitute
“relevant date falls”.
      (5)
After subsection (4) insert—
“(4A)
In subsection (4) “the relevant date”—
(a)
in relation to a Schedule 3 SAYE option scheme, has the
meaning given in paragraph 40A(6) of Schedule 3 to
ITEPA 2003, and
(b)
in relation to a Schedule 4 CSOP scheme, has the meaning
given in paragraph 28A(6) of Schedule 4 to ITEPA 2003.””
Page 276, line 42, after “under” insert “section 94A of ITTOIA 2005 or”
Page 294, line 48, leave out “paragraph 141” and insert “paragraphs 139A and 141”
Page 295, line 1, after “under” insert “section 94A of ITTOIA 2005 or”
Schedule 7
Page 311, line 41, at end insert—
“9A(1)
Section 428 (restricted securities: amount of charge) is amended as
follows.
      (2)
In subsection (7), after paragraph (ba) insert—
“(bb)
any amount that was charged to non-UK income tax in
respect of the acquisition of the employment-related
securities, but only so far as that amount exceeds any
amount within paragraph (b) or (ba),”.
      (3)
After subsection (7) insert—
“(7A)
In subsection (7)(b) and (ba) the references to an amount of
exempt income, in a case in which the amount that constituted,
or was treated as, earnings in respect of the acquisition was not
an amount of general earnings to which any of the charging
provisions of Chapters 4 and 5 of Part 2 applied, includes any
amount that would have been an amount of exempt income if
any of those charging provisions had applied.

41

(7B)
In subsection (7)(bb) “non-UK income tax” means a tax

chargeable on income under the law of a territory outside the

United Kingdom that corresponds to United Kingdom income

tax.

(7C)
A tax is not outside the scope of subsection (7B) by reason only

that it—

(a)
is chargeable under the law of a province, state or other

part of a country, or

(b)
is levied by or on behalf of a municipality or other local

body.””

Page 312, line 8, at end insert—

“11A
In section 446T (securities acquired for less than market value: amount

of notional loan), after subsection (3) insert—

“(3A)
In subsection (3)(b) and (ba) the references to an amount of

exempt income, in a case in which the amount that constitutes, or

is treated as, earnings in respect of the acquisition is not an

amount of general earnings to which any of the charging

provisions of Chapters 4 and 5 of Part 2 applies, includes any

amount that would be an amount of exempt income if any of

those charging provisions were to apply.”

Page 312, line 10, at end insert—

“12A
In section 480 (securities options: deductible amounts), after subsection

(5) insert—

“(5A)
In subsection (5)(a) the reference to an amount of exempt income,

in a case in which the amount that constituted earnings in respect

of the acquisition was not an amount of general earnings to

which any of the charging provisions of Chapters 4 and 5 of Part

2 applied, includes any amount that would have been an amount

of exempt income if any of those charging provisions had

applied.”

Page 313, line 26, at end insert—

“23A
In section 149AA (restricted and convertible employment-related

securities and employee shareholder shares), in subsection (7)—

(a)
after “include” insert “—

(a)
”, and

(b)
at the end insert “, or

(b)
in a case in which the amount that constituted, or

was treated as, earnings was not an amount of

general earnings to which any of the charging

provisions of Chapters 4 and 5 of Part 2 of ITEPA

2003 applied, any amount that would have been

an amount of such exempt income if any of those

charging provisions had applied.”
Schedule 9
Page 328, line 20, after “charity,” insert—

42

“( )
an accredited social impact contractor (see section

257JD),”

Page 330, line 33, after “Part” insert “(except section 257JD)”

Page 330, line 34, at end insert—

“257JD
Accreditation as a social impact contractor

(1)
In this Part “accredited social impact contractor” means a company limited

by shares that is accredited under this section as a social impact contractor.

(2)
Applications for accreditation as a social impact contractor must be made

to a Minister of the Crown in the form and manner specified by a Minister

of the Crown.

(3)
A Minister of the Crown is to accredit a company if, but only if, that

Minister is satisfied that—

(a)
the company has entered into a social impact contract (see section

257JE),

(b)
the company is, and at all times since its incorporation has been,

established—

(i)
for the purpose of entering into and carrying out a social

impact contract, or for that purpose and purposes incidental

to it, but

(ii)
for no other purpose, and

(c)
the activities of the company in carrying out that contract will not

consist wholly, or as to a substantial part, in excluded activities (see

section 257MQ).

(4)
If a Minister of the Crown is satisfied that the condition in subsection (3)(b)

or (c) has ceased to be met in relation to a company that is an accredited

social impact contractor, that Minister is to withdraw the company’s

accreditation with effect from the time the condition ceased to be met or a

later time.

257JE
Meaning of “social impact contract”

(1)
In this Part “social impact contract” means a contract that meets such

criteria as may be specified in regulations made by the Treasury.

(2)
The criteria which may be specified under subsection (1) include, in

particular, criteria as to a party to the contract other than the company

seeking accreditation.

(3)
Criteria may be specified in regulations under subsection (1) by reference

to material published by, or on behalf of, a Minister of the Crown after the

making of the regulations (as well as by reference to material published

before the making of the regulations).

(4)
Regulations under subsection (1) may make different provision for

different cases or circumstances or in relation to different areas.



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