Session 2014 - 15
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23

 

House of Commons

 
 

Notices of Amendments

 

given up to and including

 

Friday 7 November 2014

 

New Amendments handed in are marked thus Parliamentary Star

 

Parliamentary Star - whiteAmendments which will comply with the required notice period at their next appearance

 

Public Bill Committee


 

Taxation of Pensions Bill


 

New Clause

 

Mr David Gauke

 

NC1

 

Parliamentary Star - white    

To move the following Clause

 

         

“Death of pension scheme member

 

Schedule (Death of pension scheme member) has effect.”

 

Member’s explanatory statement

 

This new clause introduces NS1 (death of pension scheme member).

 


 

Mr David Gauke

 

Parliamentary Star - white    

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

 

member, and

 

(c)    

it is not a charity lump sum death benefit.


 
 

Notices of Amendments:                               

24

 

, continued

 
 

    (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

 

member, and

 

(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.

 

Mr David Gauke

 

Parliamentary Star - white    

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.

 

Mr David Gauke

 

Parliamentary Star - white    

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.

 

Mr David Gauke

 

Parliamentary Star - white    

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.

 

Mr David Gauke

 

Parliamentary Star - white    

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

 

scheme,

 

(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

 

scheme,”

 

Member’s explanatory statement

 

This amendment, and amendments 6, 7 and 8, ensure that income withdrawals made from a non-


 
 

Notices of Amendments:                               

25

 

, continued

 
 

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.

 

Mr David Gauke

 

Parliamentary Star - white    

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.

 

Mr David Gauke

 

Parliamentary Star - white    

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

 

scheme,

 

(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

 

scheme,”

 

Member’s explanatory statement

 

See the explanatory statement to amendment 5.

 

Mr David Gauke

 

Parliamentary Star - white    

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.

 

Mr David Gauke

 

Parliamentary Star - white    

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


 
 

Notices of Amendments:                               

26

 

, continued

 
 

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.

 

Mr David Gauke

 

Parliamentary Star - white    

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.

 

Mr David Gauke

 

Parliamentary Star - white    

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.


 
 

Notices of Amendments:                               

27

 

, continued

 
 

Mr David Gauke

 

Parliamentary Star - white    

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.

 

New Schedule

 

Mr David Gauke

 

NS1

 

Parliamentary Star - white    

To move the following Schedule

 

“Death of pension scheme member

 

Death benefits: Nominees and successors

 

Drawdown benefits for nominees and successors of deceased scheme members

 

1          

FA 2004 is amended as follows.

 

2    (1)  

Section 167 (the pension death benefit rules) is amended as follows.

 

      (2)  

In pension death benefit rule 1 (pension death benefit may be paid only to

 

dependant of deceased member) after “dependant” insert “, or nominee or

 

successor,”.

 

      (3)  

After pension death benefit rule 3 (pension death benefits which may be paid

 

under a money purchase arrangement to a dependant) insert—

 

    

Pension death benefit rule 3A

 

    

No payment of pension death benefit, other than nominees’ drawdown

 

pension in respect of a money purchase arrangement, may be made to

 

a nominee of the member.

 

    

Pension death benefit rule 3B

 

    

No payment of pension death benefit, other than successors’

 

drawdown pension in respect of a money purchase arrangement, may

 

be made to a successor of the member.”


 
 

Notices of Amendments:                               

28

 

, continued

 
 

      (4)  

After subsection (1) insert—

 

“(1A)    

For the purposes of this Part, a person becomes entitled to dependants’

 

income withdrawal, nominees’ income withdrawal or successors’

 

income withdrawal under a registered pension scheme whenever sums

 

or assets held for the purposes of an arrangement under the pension

 

scheme are designated as available for the payment of (as the case may

 

be) dependants’ drawdown pension, nominees’ drawdown pension or

 

successors’ drawdown pension.”

 

      (5)  

In subsection (2) (meaning of “pension death benefit”) after “see section 165)”

 

insert “, or a pension payable in respect of the member on the subsequent death

 

of a dependant, nominee or successor of the member”.

 

3    (1)  

In Part 2 of Schedule 28 (interpretation of the pension death benefit rules) at

 

the end insert—

 

“Meaning of “nominee”

 

27A(1)  

“Nominee of the member” means an individual—

 

(a)    

nominated by the member, or

 

(b)    

nominated by the scheme administrator,

 

            

who is not a dependant of the member, but see sub-paragraph (2).

 

      (2)  

In relation to any particular benefits under an arrangement, no

 

individual nominated by the scheme administrator counts as a

 

nominee of the member at any time when there is—

 

(a)    

a dependant of the member, or

 

(b)    

an individual, or charity, nominated by the member in

 

relation to the benefits.

 

      (3)  

The reference in sub-paragraph (2)(b) to being nominated in

 

relation to particular benefits under an arrangement includes—

 

(a)    

a reference to being nominated in relation to the scheme,

 

(b)    

a reference to being nominated in relation to arrangements

 

that include the arrangement,

 

(c)    

a reference to being nominated in relation to the

 

arrangement, and

 

(d)    

a reference to being nominated in relation to benefits that

 

include the particular benefits.

 

Nominees’ drawdown pension

 

27B      

“Nominees’ drawdown pension” means—

 

(a)    

a nominees’ short-term annuity, or

 

(b)    

nominees’ income withdrawal.

 

Nominees’ short-term annuity

 

27C(1)  

For the purposes of this Part an annuity payable to a nominee is a

 

nominees’ short-term annuity if—

 

(a)    

it is purchased by the application of sums or assets

 

representing the whole or any part of the nominee’s flexi-

 

access drawdown fund in respect of an arrangement,

 

(b)    

it is payable by an insurance company,


 
 

Notices of Amendments:                               

29

 

, continued

 
 

(c)    

the nominee becomes entitled to it on or after 6 April 2015,

 

and

 

(d)    

it is payable for a term which does not exceed five years

 

and ends before the nominee dies.

 

      (2)  

The Commissioners for Her Majesty’s Revenue and Customs may

 

by regulations make provision in relation to cases in which a

 

nominees’ short-term annuity payable to a person (“the original

 

nominees’ short-term annuity”) ceases to be payable and in

 

consequence of that—

 

(a)    

sums or assets (or both) are transferred from the insurance

 

company to another insurance company and are applied—

 

(i)    

towards the provision of another nominees’ short-

 

term annuity (a “new nominees’ short-term

 

annuity”) by the other insurance company, or

 

(ii)    

otherwise, or

 

(b)    

sums or assets are transferred to the relevant registered

 

pension scheme.

 

      (3)  

The regulations may provide that—

 

(a)    

in a case where a new nominees’ short-term annuity

 

becomes payable, the new nominees’ short-term annuity is

 

to be treated, to such extent as is prescribed by the

 

regulations and for such of the purposes of this Part as are

 

so prescribed, as if it were the original nominees’ short-

 

term annuity, and

 

(b)    

in any other case, the relevant registered pension scheme is

 

to be treated as making an unauthorised payment in respect

 

of the member of an amount equal to the aggregate of the

 

sums, and the market value of the assets, transferred.

 

      (4)  

For the purposes of sub-paragraphs (2) and (3) a registered pension

 

scheme is the relevant registered pension scheme if the original

 

nominees’ short-term annuity was acquired using sums or assets

 

held for the purposes of the pension scheme.

 

Nominees’ income withdrawal

 

27D      

“Nominees’ income withdrawal” means an amount (other than an

 

annuity) which the nominee is entitled to be paid from the

 

nominee’s flexi-access drawdown fund in respect of an

 

arrangement.

 

Nominee’s flexi-access drawdown fund

 

27E(1)  

For the purposes of this Part a nominee’s flexi-access drawdown

 

fund in respect of an arrangement consists of such of the sums or

 

assets held for the purposes of the arrangement as are newly-

 

designated nominee funds.

 

      (2)  

For the purposes of this Part sums or assets held for the purposes of

 

an arrangement are newly-designated nominee funds if—

 

(a)    

they—

 

(i)    

have, at any time on or after 6 April 2015, been

 

designated under the arrangement as available for

 

the payment of nominees’ drawdown pension, and


 
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Revised 10 November 2014