Taxation of Pensions Bill (HC Bill 122)

(iii) it would be a lifetime annuity if any
provision made under this paragraph were
15ignored,

(iv) the terms of the contract for it are such that
there will or could be decreases in its
amount other than allowed decreases (see
sub-paragraph (2E)), and

(v) 20any other conditions prescribed by the
regulations are met,

the new annuity is not a lifetime annuity for the
purposes of this Part,, and

(b) in paragraph (b) for “any other case” substitute “a case other than one
25where a new lifetime annuity becomes payable”.

(2) In paragraph 3 after sub-paragraph (2D) insert—

(2E) In sub-paragraph (2C)(za)(iv) “allowed decreases” means
decreases from time to time allowed by regulations under sub-
paragraph (1)(d); and any such regulations are to be treated as
30having effect for this purpose.

45 In paragraph 6(1) (definition of member’s short-term annuity) after
paragraph (c) insert—

ERROR:This is very likely an error in markup in the FM document. Amendments generally should not occur nested in this manner [\t (ca)\tthe member becomes entitled to it before 6 April 2015,\xd3 . ]

46 (1) In paragraph 6(1C) (regulations for cases where short-term annuity ceases
35and funds are transferred)—

(a) before paragraph (a) insert—

(za) in a case where—

(i) a new annuity becomes payable,

(ii) the member becomes entitled to it on or
40after 6 April 2015,

(iii) it would be a short-term annuity if any
provision made under this paragraph were
ignored,

(iv) the terms of the contract for it are such that
45there will or could be decreases in its
amount other than allowed decreases (see
sub-paragraph (1E)), and

Taxation of Pensions BillPage 18

(v) any other conditions prescribed by the
regulations are met,

the new annuity is not a short-term annuity for the
purposes of this Part,, and

(b) 5in paragraph (b) for “any other case” substitute “a case other than one
where a new short-term annuity becomes payable”.

(2) In paragraph 6 after sub-paragraph (1D) insert—

(1E) In sub-paragraph (1C)(za)(iv) “allowed decreases” means
decreases from time to time allowed by regulations under sub-
10paragraph (1)(e); and any such regulations are to be treated as
having effect for this purpose.

47 In paragraph 17(1) (definition of dependants’ annuity) for paragraph (za)
substitute—

(za) either—

(i) 15it is purchased together with a lifetime annuity
payable to the member and the member becomes
entitled to that lifetime annuity before 6 April 2015,
or

(ii) it is purchased after the member’s death and the
20dependant becomes entitled to it before 6 April
2015,.

48 In paragraph 17(1A) for “sub-paragraph (1)(za)” substitute “sub-paragraphs
(1)(za) and (1ZA)(a)”.

49 (1) In paragraph 17(4) (regulations for cases where dependants’ annuity ceases
25and funds are transferred)—

(a) before paragraph (a) insert—

(za) in a case where—

(i) a new annuity becomes payable,

(ii) the dependant becomes entitled to it on or
30after 6 April 2015,

(iii) it would be a dependants’ annuity if any
provision made under this paragraph were
ignored,

(iv) the terms of the contract for it are such that
35there will or could be decreases in its
amount other than allowed decreases (see
sub-paragraph (6)), and

(v) any other conditions prescribed by the
regulations are met,

40the new annuity is not a dependants’ annuity for
the purposes of this Part,, and

(b) in paragraph (b) for “any other case” substitute “a case other than one
where a new dependants’ annuity becomes payable”.

(2) In paragraph 17 after sub-paragraph (5) insert—

(6) 45In sub-paragraph (4)(za)(iv) “allowed decreases” means decreases
from time to time allowed by regulations under sub-paragraph
(1)(c); and any such regulations are to be treated as having effect
for this purpose.

Taxation of Pensions BillPage 19

50 In paragraph 20(1) (definition of dependants’ short-term annuity) after
paragraph (c) insert—

(ca) the dependant becomes entitled to it before 6 April 2015,.

51 (1) In paragraph 20(1C) (regulations for cases where dependants’ short-term
5annuity ceases and funds are transferred)—

(a) before paragraph (a) insert—

(za) in a case where—

(i) a new annuity becomes payable,

(ii) the dependant becomes entitled to it on or
10after 6 April 2015,

(iii) it would be a dependants’ short-term
annuity if any provision made under this
paragraph were ignored,

(iv) the terms of the contract for it are such that
15there will or could be decreases in its
amount other than allowed decreases (see
sub-paragraph (1E)), and

(v) any other conditions prescribed by the
regulations are met,

20the new annuity is not a dependants’ short-term
annuity for the purposes of this Part,, and

(b) in paragraph (b) for “any other case” substitute “a case other than one
where a new dependants’ short-term annuity becomes payable”.

(2) In paragraph 20 after sub-paragraph (1D) insert—

(1E) 25In sub-paragraph (1C)(za)(iv) “allowed decreases” means
decreases from time to time allowed by regulations under sub-
paragraph (1)(e); and any such regulations are to be treated as
having effect for this purpose.

Consequential amendment

52 30In Schedule 16 to FA 2011 (benefits under pension schemes) in each of
paragraphs 87 and 95 (entitlement to unsecured or alternatively secured
pension on 5 April 2011) for “the reference” substitute “a reference”.

Part 3 Pension payments out of uncrystallised funds

35Definitions etc

53 Part 4 of FA 2004 is amended as follows.

54 In section 166(1) (lump sums which may be paid by registered pension
scheme) in the lump sum rule after paragraph (b) insert—

(ba) an uncrystallised funds pension lump sum,.

55 40In section 166(2) (when a person becomes entitled to a lump sum under a
registered pension scheme) before the “and” at the end of paragraph (a)
insert—

(aa) in the case of an uncrystallised funds pension lump sum,
immediately before it is paid,.