|
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| |
| |
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| | (i) | omit “or dependants’ income withdrawal”, and |
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| | (ii) | for “paragraphs 7 and 21” substitute “paragraph 7”, and |
|
| | (b) | before the “and” at the end of paragraph (b) insert— |
|
| | “(ba) | an amount paid under a relevant non-UK scheme or |
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| | an overseas pension scheme which, if the scheme |
|
| | were a registered pension scheme, would be |
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| | dependants’ income withdrawal or nominees’ income |
|
| | withdrawal (within the meaning of paragraphs 21 and |
|
| | 27D of Schedule 28 to FA 2004), |
|
| | (bb) | an amount paid under a relevant non-UK scheme or |
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| | an overseas pension scheme which, if the scheme |
|
| | were a registered pension scheme, would be |
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| | successors’ income withdrawal (within the meaning |
|
| | of paragraph 27J of Schedule 28 to FA 2004),”. |
|
| | (4) | In section 579A(1) (section applies to pensions under registered pension |
|
| | schemes, subject to subsection (2)) after “subsection (2)” insert “and section |
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| | |
| | (5) | After section 579C insert— |
|
| | “579CZA | Exemption for beneficiaries’ income withdrawal in some cases |
|
| | (1) | Section 579A does not apply to dependants’ income withdrawal or |
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| | nominees’ income withdrawal if it is paid— |
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| | (a) | in respect of a deceased member of a registered pension |
|
| | scheme who had not reached the age of 75 at the date of the |
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| | |
| | (b) | to a person from the person’s— |
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| | (i) | dependant’s drawdown pension fund, |
|
| | (ii) | dependant’s flexi-access drawdown fund, or |
|
| | (iii) | nominee’s flexi-access drawdown fund, |
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| | | in respect of a money purchase arrangement under a registered |
|
| | |
| | (2) | Section 579A does not apply to successors’ income withdrawal if it is |
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| | |
| | (a) | in respect of a deceased beneficiary of a deceased member of |
|
| | a registered pension scheme where the beneficiary had not |
|
| | reached the age of 75 at the date of the beneficiary’s death, |
|
| | |
| | (b) | to a person from the person’s successor’s flexi-access |
|
| | drawdown fund in respect of a money purchase arrangement |
|
| | under a registered pension scheme, |
|
| | | and here “beneficiary” means dependant, nominee or successor. |
|
| | (3) | Subsection (1) is subject to the following provisions of this section. |
|
| | (4) | Section 579A does apply to dependants’ income withdrawal paid on |
|
| | or after 6 April 2015 to a person from the person’s dependant’s |
|
| | drawdown pension fund in respect of a money purchase arrangement |
|
| | under a registered pension scheme (“the drawdown fund”) if before 6 |
|
| | |
| | (a) | any payment of dependants’ income withdrawal was made |
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| | |
| | (i) | the drawdown fund, or |
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|
|
| |
| |
|
| | (ii) | any fund represented (to any extent) by the drawdown |
|
| | |
| | (b) | any payment was made of a dependants’ short-term annuity |
|
| | purchased using sums or assets out of— |
|
| | (i) | the drawdown fund, or |
|
| | (ii) | any fund represented (to any extent) by the drawdown |
|
| | |
| | (5) | Section 579A does apply to dependants’ income withdrawal paid in |
|
| | respect of a deceased member of a registered pension scheme to a |
|
| | person from the person’s dependant’s flexi-access drawdown fund in |
|
| | respect of a money purchase arrangement under a registered pension |
|
| | scheme (“the new fund”) if— |
|
| | (a) | any of the sums or assets that make up the new fund— |
|
| | (i) | became newly-designated dependant funds under |
|
| | paragraph 22A(2)(b) of Schedule 28 to FA 2004 or as |
|
| | a result of the operation of any of paragraphs 22B to |
|
| | |
| | (ii) | arise, or (directly or indirectly) derive, from any such |
|
| | newly-designated dependant funds or from sums or |
|
| | assets which so arise or derive, |
|
| | (b) | before 6 April 2015 any payment of dependants’ income |
|
| | withdrawal in respect of the deceased member was made to |
|
| | the person from the person’s dependant’s drawdown pension |
|
| | fund in respect of a money purchase arrangement under a |
|
| | registered pension scheme, and |
|
| | (c) | any of the sums or assets that made up that fund at the time of |
|
| | that payment to any extent make up, or are represented by |
|
| | sums or assets that to any extent make up, the new fund. |
|
| | (6) | Where relevant unused uncrystallised funds— |
|
| | (a) | are designated on or after 6 April 2015 as available for the |
|
| | payment of dependants’ drawdown pension or nominees’ |
|
| | |
| | (b) | as a result of the designation make up (to any extent) a |
|
| | person’s dependant’s flexi-access drawdown fund or |
|
| | nominee’s flexi-access drawdown fund in respect of a money |
|
| | purchase arrangement under a registered pension scheme, but |
|
| | (c) | are not so designated before the end of the relevant two-year |
|
| | |
| | | section 579A does apply to dependants’ income withdrawal or |
|
| | nominees’ income withdrawal paid to the person from the fund so far |
|
| | as it is paid in respect of sums or assets for the time being representing |
|
| | the whole or any part of those relevant unused uncrystallised funds. |
|
| | |
| | “dependant”, “nominee” and “successor” have the meaning given |
|
| | (respectively) by paragraphs 15, 27A and 27F of Schedule 28 to FA |
|
| | |
| | “dependant’s drawdown pension fund”, “dependant’s flexi-access |
|
| | drawdown fund”, “nominee’s flexi-access drawdown fund” and |
|
| | “successor’s flexi-access drawdown fund” have the meaning given |
|
| | (respectively) by paragraphs 22, 22A, 27E and 27K of Schedule 28 to |
|
| | |
|
|
| |
| |
|
| | “money purchase arrangement” has the meaning given by section 152 of |
|
| | |
| | “the relevant two-year period”, in relation to relevant unused |
|
| | uncrystallised funds held for the purposes of a money purchase |
|
| | arrangement relating to a deceased individual under a registered |
|
| | pension scheme, means the period of two years beginning with the |
|
| | earlier of the day on which the scheme administrator of the scheme |
|
| | first knew of the individual’s death and the day on which the scheme |
|
| | administrator could first reasonably have been expected to have |
|
| | |
| | (8) | For the purposes of this section, sums or assets held after the death of |
|
| | a member of a registered pension scheme for the purposes of a money |
|
| | purchase arrangement relating to the member under the scheme are |
|
| | “relevant unused uncrystallised funds” if— |
|
| | (a) | they are unused uncrystallised funds, and |
|
| | (b) | the member had not reached the age of 75 at the date of the |
|
| | |
| | (9) | Paragraph 27E(4) and (5) of Schedule 28 of FA 2004 (meaning of |
|
| | “unused uncrystallised funds”) apply for the purposes of subsection |
|
| | |
| | (6) | In section 579D (interpretation of sections 579A to 579D)— |
|
| | (a) | at the appropriate places insert— |
|
| | ““nominees’ income withdrawal” has the meaning given by |
|
| | paragraph 27D of that Schedule;”, and |
|
| | ““successors’ income withdrawal” has the meaning given by |
|
| | paragraph 27J of Schedule 28 to FA 2004.”, and |
|
| | (b) | in paragraph (b) of the definition of “pension under a registered |
|
| | pension scheme” after “dependants’ income withdrawal” insert “, or |
|
| | nominees’ income withdrawal or successors’ income withdrawal,”. |
|
| | (7) | The amendments made by sub-paragraphs (2) to (5) have effect in relation to |
|
| | pension paid on or after 6 April 2015.” |
|
| | Member’s explanatory statement
|
|
| | This new Schedule provides that persons other than dependants can inherit unused drawdown |
|
| | funds. For deaths before age 75, lump sum death benefits and flexi-access drawdown pensions |
|
| | from these funds can be paid tax free, subject (for example) to the member having sufficient |
|
| | available lifetime allowance. |
|
| |
| Schedule, page 11, line 3, at end insert— |
|
| | “(2A) | A lump sum death benefit is also a flexi-access drawdown fund |
|
| | lump sum death benefit if— |
|
| | (a) | it is paid on the death of a nominee of the member, |
|
| | (b) | it is paid in respect of nominees’ income withdrawal to |
|
| | which the nominee was at the date of the nominee’s death |
|
| | entitled to be paid from the nominee’s flexi-access |
|
| | drawdown fund in respect of an arrangement relating to the |
|
| | |
| | (c) | it is not a charity lump sum death benefit. |
|
| | (2B) | A lump sum death benefit is also a flexi-access drawdown fund |
|
| | lump sum death benefit if— |
|
|
|
| |
| |
|
| | (a) | it is paid on the death of a successor of the member, |
|
| | (b) | it is paid in respect of successors’ income withdrawal to |
|
| | which the successor was at the date of the successor’s death |
|
| | entitled to be paid from the successor’s flexi-access |
|
| | drawdown fund in respect of an arrangement relating to the |
|
| | |
| | (c) | it is not a charity lump sum death benefit.” |
|
| | Member’s explanatory statement
|
|
| | This amendment, and amendment 2, ensure that unused funds in the drawdown fund of a deceased |
|
| | beneficiary, who was not a dependant of the member, can be paid out as a lump sum death benefit. |
|
| |
| Schedule, page 11, line 5, leave out “or (2)” and insert “, (2), (2A) or (2B)” |
|
| | Member’s explanatory statement
|
|
| | See explanatory statement to amendment 1. |
|
| |
| Schedule, page 11, line 10, leave out “or dependant’s” and insert “, dependant’s, |
|
| nominee’s or successor’s” |
|
| | Member’s explanatory statement
|
|
| | This amendment ensures that the maximum lump sum death benefit that can be paid from a non- |
|
| | dependant beneficiary’s drawdown fund is equal to the value of the investments representing the |
|
| | funds that were unused immediately before the beneficiary’s death. |
|
| |
| Schedule, page 35, line 3, at end insert— |
|
| | “(da) | a payment of nominees’ drawdown pension, |
|
| | (db) | paid to purchase a nominees’ short-term annuity, |
|
| | (dc) | a payment of successors’ drawdown pension, |
|
| | (dd) | paid to purchase a successors’ short-term annuity,” |
|
| | Member’s explanatory statement
|
|
| | This amendment extends the circumstances when pension schemes can pay benefits that are |
|
| | authorised payments for tax purposes but are not permitted under their scheme rules. It adds |
|
| | drawdown pensions paid to non-dependant beneficiaries. |
|
| |
| Schedule, page 35, line 38, at end insert— |
|
| | “(ba) | any nominees’ income withdrawal paid to the person from a |
|
| | nominee’s flexi-access drawdown fund in respect of an |
|
| | arrangement relating to the person under a registered pension |
|
| | |
| | (bb) | any successors’ income withdrawal paid to the person from a |
|
| | successor’s flexi-access drawdown fund in respect of an |
|
| | arrangement relating to the person under a registered pension |
|
| | |
| | Member’s explanatory statement
|
|
| | This amendment, and amendments 6, 7 and 8, ensure that income withdrawals made from a non- |
|
| | dependant beneficiary’s drawdown fund under a registered pension scheme when the beneficiary |
|
| | was temporarily non-resident are treated as accruing when the person returns to the UK. |
|
|
|
| |
| |
|
| |
| Schedule, page 35, line 46, at end insert— |
|
| | “(da) | any payment to the person of a nominees’ short-term annuity |
|
| | purchased using sums or assets out of a nominee’s flexi- |
|
| | access drawdown fund in respect of an arrangement relating |
|
| | to the person under a registered pension scheme, |
|
| | (db) | any payment to the person of a successors’ short-term annuity |
|
| | purchased using sums or assets out of a successor’s flexi- |
|
| | access drawdown fund in respect of an arrangement relating |
|
| | to the person under a registered pension scheme,” |
|
| | Member’s explanatory statement
|
|
| | See the explanatory statement to amendment 5. |
|
| |
| Schedule, page 37, line 22, at end insert— |
|
| | “(ba) | any nominees’ income withdrawal paid to the person from a |
|
| | nominee’s flexi-access drawdown fund in respect of an |
|
| | arrangement relating to the person under a registered pension |
|
| | |
| | (bb) | any successors’ income withdrawal paid to the person from a |
|
| | successor’s flexi-access drawdown fund in respect of an |
|
| | arrangement relating to the person under a registered pension |
|
| | |
| | Member’s explanatory statement
|
|
| | See the explanatory statement to amendment 5. |
|
| |
| Schedule, page 37, line 30, at end insert— |
|
| | “(da) | any payment to the person of a nominees’ short-term annuity |
|
| | purchased using sums or assets out of a nominee’s flexi- |
|
| | access drawdown fund in respect of an arrangement relating |
|
| | to the person under a registered pension scheme, |
|
| | (db) | any payment to the person of a successors’ short-term annuity |
|
| | purchased using sums or assets out of a successor’s flexi- |
|
| | access drawdown fund in respect of an arrangement relating |
|
| | to the person under a registered pension scheme,” |
|
| | Member’s explanatory statement
|
|
| | See the explanatory statement to amendment 5. |
|
| |
| Schedule, page 39, line 16, at end insert— |
|
| | “(ba) | is paid to the person in respect of an arrangement relating to |
|
| | the person under the scheme and would, if the scheme were a |
|
| | registered pension scheme, be nominees’ income withdrawal |
|
| | (within the meaning of paragraph 27D of Schedule 28 to FA |
|
| | 2004) paid to the person from the person’s nominee’s flexi- |
|
| | access drawdown fund in respect of the arrangement, |
|
| | (bb) | is paid to the person in respect of an arrangement relating to |
|
| | the person under the scheme and would, if the scheme were a |
|
| | registered pension scheme, be successors’ income withdrawal |
|
|
|
| |
| |
|
| | (within the meaning of paragraph 27J of Schedule 28 to FA |
|
| | 2004) paid to the person from the person’s successor’s flexi- |
|
| | access drawdown fund in respect of the arrangement,” |
|
| | Member’s explanatory statement
|
|
| | This amendment, and amendments 10, 11 and 12, ensure that payments by a non-UK pension |
|
| | scheme during a person’s period of temporary non-residence that correspond to income |
|
| | withdrawals from a drawdown fund under a registered pension scheme are treated as arising when |
|
| | the person returns to the UK. |
|
| |
| Schedule, page 39, line 32, at end insert— |
|
| | “(da) | is a payment to the person of an annuity purchased using sums |
|
| | or assets held for the purposes of an arrangement relating to |
|
| | the person under the scheme and would, if the scheme were a |
|
| | registered pension scheme, be a payment of a nominees’ |
|
| | short-term annuity (within the meaning of paragraph 27C of |
|
| | Schedule 28 to FA 2004) purchased using sums or assets out |
|
| | of the person’s nominee’s flexi-access drawdown fund in |
|
| | respect of the arrangement, |
|
| | (db) | is a payment to the person of an annuity purchased using sums |
|
| | or assets held for the purposes of an arrangement relating to |
|
| | the person under the scheme and would, if the scheme were a |
|
| | registered pension scheme, be a payment of a successors’ |
|
| | short-term annuity (within the meaning of paragraph 27H of |
|
| | Schedule 28 to FA 2004) purchased using sums or assets out |
|
| | of the person’s successor’s flexi-access drawdown fund in |
|
| | respect of the arrangement,” |
|
| | Member’s explanatory statement
|
|
| | See the explanatory statement to amendment 9. |
|
| |
| Schedule, page 41, line 16, at end insert— |
|
| | “(ba) | is paid to the person in respect of an arrangement relating to |
|
| | the person under the scheme and would, if the scheme were a |
|
| | registered pension scheme, be nominees’ income withdrawal |
|
| | (within the meaning of paragraph 27D of Schedule 28 to FA |
|
| | 2004) paid to the person from the person’s nominee’s flexi- |
|
| | access drawdown fund in respect of the arrangement, |
|
| | (bb) | is paid to the person in respect of an arrangement relating to |
|
| | the person under the scheme and would, if the scheme were a |
|
| | registered pension scheme, be successors’ income withdrawal |
|
| | (within the meaning of paragraph 27J of Schedule 28 to FA |
|
| | 2004) paid to the person from the person’s successor’s flexi- |
|
| | access drawdown fund in respect of the arrangement,” |
|
| | Member’s explanatory statement
|
|
| | See the explanatory statement to amendment 9. |
|
| |
| Schedule, page 41, line 32, at end insert— |
|
| | “(da) | is a payment to the person of an annuity purchased using sums |
|
| | or assets held for the purposes of an arrangement relating to |
|
|
|
| |
| |
|
| | the person under the scheme and would, if the scheme were a |
|
| | registered pension scheme, be a payment of a nominees’ |
|
| | short-term annuity (within the meaning of paragraph 27C of |
|
| | Schedule 28 to FA 2004) purchased using sums or assets out |
|
| | of the person’s nominee’s flexi-access drawdown fund in |
|
| | respect of the arrangement, |
|
| | (db) | is a payment to the person of an annuity purchased using sums |
|
| | or assets held for the purposes of an arrangement relating to |
|
| | the person under the scheme and would, if the scheme were a |
|
| | registered pension scheme, be a payment of a successors’ |
|
| | short-term annuity (within the meaning of paragraph 27H of |
|
| | Schedule 28 to FA 2004) purchased using sums or assets out |
|
| | of the person’s successor’s flexi-access drawdown fund in |
|
| | respect of the arrangement,” |
|
| | Member’s explanatory statement
|
|
| | See the explanatory statement to amendment 9. |
|
| |
|