Committee of the whole House Proceedings: 25 April 2017      

8

Finance (No. 2) Bill, continued

Chancellor of the Exchequer

Agreed to  16

Schedule  3,  page  166,  line  31,  at end insert—

“(6BA)    

For the purposes of subsection (6A)(c)(ii), regulations made by the

Commissioners for Her Majesty’s Revenue and Customs may make provision—

(a)    

for determining whether there is an increase in the value of a person’s

rights,

(b)    

for determining the amount of any increase, and

(c)    

for ignoring the whole or part of any increase;

and regulations under this subsection may make provision having effect in

relation to times before the regulations are made.”

Chancellor of the Exchequer

Agreed to  17

Schedule  3,  page  166,  line  32,  leave out “subsection (6B)(b)” and insert “this

section”

Chancellor of the Exchequer

Agreed to  18

Schedule  3,  page  167,  leave out lines 5 to 7

Chancellor of the Exchequer

Agreed to  19

Schedule  3,  page  167,  line  8,  after “subsection” insert “(6BA) or”

Chancellor of the Exchequer

Agreed to  20

Schedule  3,  page  167,  line  10,  leave out from “(7)” to end of line 16 and insert “—

(a)    

for “In this section—” substitute “For the purposes of this section—

“arrangement”, in relation to a member of a

superannuation fund, means an arrangement relating

to the member under the fund;

a money purchase arrangement relating to a member of

a superannuation fund is a “cash balance

arrangement” at any time if, at that time, all the

benefits that may be provided to or in respect of the

member under the arrangement are cash balance

benefits;

an arrangement relating to a member of a

superannuation fund is a “defined benefits

arrangement” at any time if, at that time, all the

benefits that may be provided to or in respect of the

member under the arrangement are defined benefits;

an arrangement relating to a member of a

superannuation fund is a “money purchase

arrangement” at any time if, at that time, all the

benefits that may be provided to or in respect of the

member under the arrangement are money purchase

benefits;

“cash balance benefits”, “defined benefits” and “money

purchase benefits” have the meaning given by section

152 of the Finance Act 2004, but for this purpose

Committee of the whole House Proceedings: 25 April 2017      

9

Finance (No. 2) Bill, continued

reading references in that section to a pension scheme

as references to a superannuation fund;

“member”, in relation to a superannuation fund, has the

meaning given by section 151 of the Finance Act

2004, but for this purpose reading references in that

section to a pension scheme as references to a

superannuation fund;”;

(b)    

at the end insert—

““the valuation assumptions” has the meaning given by

section 277 of the Finance Act 2004.””

Chancellor of the Exchequer

Agreed to  21

Schedule  3,  page  167,  line  16,  at end insert—

    “( )  

After subsection (10) insert—

“(11)    

Where the conditions in subsection (6)(a) to (c) are met in the case of

a superannuation fund (“the actual fund”)—

(a)    

any disqualifying contributions made under an arrangement

relating to a member of the actual fund are treated for the

purposes of the Income Tax Acts as instead made under an

arrangement relating to the member under a separate

superannuation fund (“the shadow fund” for the actual fund),

(b)    

any disqualifying increase in the value of a person’s rights

under an arrangement relating to a member of the actual fund

is treated for the purposes of the Income Tax Acts as instead

being an increase under an arrangement relating to the

member under the shadow fund for the actual fund, and

(c)    

any reference in this or any other Act (including the reference

in subsection (3) and any reference enacted after the coming

into force of this subsection) to a fund, or superannuation

fund, to which subsection (3) applies does not include so

much of the actual fund as—

(i)    

represents any contribution treated as made under, or

any increase in the value of any rights treated as an

increase under, the shadow fund of the actual fund or

the shadow fund of any other superannuation fund, or

(ii)    

arises, or (directly or indirectly) derives, from

anything within sub-paragraph (i) or this sub-

paragraph.

(12)    

For the purposes of subsection (11) a contribution, or an increase in the

value of any rights, is “disqualifying” if it would (ignoring that

subsection) cause the benefit accrual condition not to be met in the

case of the actual fund.

(13)    

For the purposes of the provisions of this section relating to the benefit

accrual condition, where there is a recognised transfer—

(a)    

any transfer of sums or assets to the recipient fund by the

recognised transfer is to be categorised as not being “a

contribution” to the recipient fund, and

(b)    

any increase in the value of rights under the recipient fund that

occurs at the time of the recognised transfer is to be treated as

not being an increase in that value if the increase is solely a

result of the transfer effected by the recognised transfer.

Committee of the whole House Proceedings: 25 April 2017      

10

Finance (No. 2) Bill, continued

(14)    

For the purposes of subsection (13), where there is a transfer such that

sums or assets held for the purposes of, or representing accrued rights

under, an arrangement relating to a member of a superannuation fund

(“the transferor fund”) are transferred so as to become held for the

purposes of, or to represent rights under, an arrangement relating to

that person as a member of another superannuation fund, the transfer

is a “recognised transfer” if—

(a)    

the conditions in subsection (6)(a) to (c) are met in the case of

each of the funds, and

(b)    

none of the sums and assets transferred—

(i)    

represents any contribution treated as made under, or

any increase in the value of any rights treated as an

increase under, the shadow fund of the transferor fund

or the shadow fund of any other superannuation fund,

or

(ii)    

arises, or (directly or indirectly) derives, from

anything within sub-paragraph (i) or this sub-

paragraph.””

Chancellor of the Exchequer

Agreed to  22

Schedule  3,  page  167,  line  19,  leave out sub-paragraphs (6) to (8)

Chancellor of the Exchequer

Agreed to  23

Schedule  3,  page  169,  line  13,  leave out “Subsection (4) does not” and insert

“Subsections (7A) and (7B)”

Chancellor of the Exchequer

Agreed to  24

Schedule  3,  page  169,  line  20,  at end insert—

“(7A)    

If the lump sum is wholly in respect of rights which have accrued on or after 6

April 2017, there is no reduction under subsection (4).

(7B)    

If the lump sum is wholly or partly in respect of rights which accrued before 6

April 2017, the amount of any reduction under subsection (4) is given by—

where—

A is so much of the lump sum as is in respect of rights which accrued before

6 April 2017,

LS is the amount of the lump sum, and

R is the amount which (ignoring this subsection) is given by subsection (4)

as the amount of the reduction.”

Chancellor of the Exchequer

Agreed to  25

Schedule  3,  page  170,  line  22,  at beginning insert—

“Where the lump sum is paid under a pension scheme that was an employer-

financed retirement benefits scheme immediately before 6 April 2017, deduct so

much of the lump sum left after Step 1 as is deductible in accordance with

subsection (5A).

Where the lump sum is paid otherwise than under such a scheme,”

Committee of the whole House Proceedings: 25 April 2017      

11

Finance (No. 2) Bill, continued

Chancellor of the Exchequer

Agreed to  26

Schedule  3,  page  170,  line  23,  leave out “rights, which accrued before 6 April

2017,” and insert “the value immediately before 6 April 2017 of rights, accrued by then,”

Chancellor of the Exchequer

Agreed to  27

Schedule  3,  page  170,  line  39,  at end insert—

“(5A)    

These rules apply for the purposes of the first sentence of Step 2—

(a)    

“the post-Step 1 amount” means so much of the lump sum as is left after

Step 1;

(b)    

“the relevant amount” means so much of the post-Step 1 amount as is

paid in respect of rights specifically to receive benefits by way of lump

sum payments;

(c)    

“reckonable service” means service in respect of which the rights to

receive the relevant amount accrued (whether or not service in the same

employment or with the same employer, and even if the rights originally

accrued under a different employer-financed retirement benefits scheme

established in or outside the United Kingdom);

(d)    

“pre-6 April 2017 reckonable service” means reckonable service that is

service before 6 April 2017;

(e)    

“pre-6 April 2017 reckonable foreign service” means pre-6 April 2017

reckonable service that is foreign service;

(f)    

the deductible amount is the value immediately before 6 April 2017 of

the rights then accrued to payment of so much of the relevant amount as

is paid in respect of pre-6 April 2017 reckonable service if—

(i)    

at least 75% of pre-6 April 2017 reckonable service is made up

of foreign service, or

(ii)    

the period of pre-6 April 2017 reckonable service exceeds 10

years and the whole of the last 10 years of that period is made up

of foreign service, or

(iii)    

the period of pre-6 April 2017 reckonable service exceeds 20

years and at least 50% of that period, including any 10 of the last

20 years, is made up of foreign service;

(g)    

otherwise, the deductible amount is the appropriate fraction of the value

immediately before 6 April 2017 of the rights then accrued to payment of

so much of the relevant amount as is paid in respect of pre-6 April 2017

reckonable service;

(h)    

“the appropriate fraction” is given by—

where—

F is the period of pre-6 April 2017 reckonable foreign service, and

R is the period of pre-6 April 2017 reckonable service.”

Chancellor of the Exchequer

Agreed to  28

Schedule  3,  page  170,  line  42,  at end insert—

““foreign service” has the meaning given by section 395C,”

Committee of the whole House Proceedings: 25 April 2017      

12

Finance (No. 2) Bill, continued

Chancellor of the Exchequer

Agreed to  29

Schedule  3,  page  171,  line  17,  at end insert—

“Relief from tax under Part 9 of ITEPA 2003 not to give rise to tax under other provisions

13  (1)  

In section 393B(2)(a) of ITEPA 2003 (tax on benefits under employer-

financed retirement benefit schemes: “relevant benefits” do not include

benefits charged to tax under Part 9), after “646E” insert “or any deductions

under section 574A(3)”.

      (2)  

The amendment made by this paragraph has effect in relation to benefits by

way of lump sums paid on or after 6 April 2017.”

Schedule, as amended, Agreed to.

Chancellor of the Exchequer

Agreed to  30

Schedule  4,  page  172,  line  23,  after “sub-paragraph” insert “(6C) or”

Chancellor of the Exchequer

Agreed to  31

Schedule  4,  page  174,  line  21,  at end insert—

  “(4A)  

In sub-paragraph (4) (power to specify whether payments by scheme are

referable to relevant transfer fund), after “payments or transfers made (or

treated as made) by” insert “, or other things done by or to or under or in respect

of or in the case of,”.”

Chancellor of the Exchequer

Agreed to  32

Schedule  4,  page  176,  line  28,  leave out “with the next 5” and insert “immediately

before the next 6”

Chancellor of the Exchequer

Agreed to  33

Schedule  4,  page  177,  line  1,  leave out “with the next 5” and insert “immediately

before the next 6”

Chancellor of the Exchequer

Agreed to  34

Schedule  4,  page  178,  line  8,  leave out “for the purposes of sections 244L and 254”

Chancellor of the Exchequer

Agreed to  35

Schedule  4,  page  178,  line  28,  leave out “for the purposes of sections 244L and

254”

Chancellor of the Exchequer

Agreed to  36

Schedule  4,  page  178,  line  48,  leave out “for the purposes of sections 244L and

254”

Committee of the whole House Proceedings: 25 April 2017      

13

Finance (No. 2) Bill, continued

Chancellor of the Exchequer

Agreed to  37

Schedule  4,  page  179,  line  18,  leave out “for the purposes of sections 244L and

254”

Chancellor of the Exchequer

Agreed to  38

Schedule  4,  page  180,  line  19,  leave out “was” and insert “has been”

Chancellor of the Exchequer

Agreed to  39

Schedule  4,  page  180,  line  21,  leave out “was” and insert “has been”

Chancellor of the Exchequer

Agreed to  40

Schedule  4,  page  183,  line  17,  leave out from beginning to fourth “the”

Chancellor of the Exchequer

Agreed to  41

Schedule  4,  page  184,  leave out lines 30 to 38

Chancellor of the Exchequer

Agreed to  42

Schedule  4,  page  188,  line  8,  at end insert—

“17A      

In Schedule 32 (benefit crystallisation events: supplementary provision), after

paragraph 2 insert—

“Avoiding double counting of refunded amounts of overseas transfer charge

2A  (1)  

This paragraph applies where an amount of overseas transfer charge

is repaid (whether or not under section 244M) to the scheme

administrator of one of the relevant pension schemes.

      (2)  

The amount crystallised by the first benefit crystallisation event that

occurs in respect of the individual and a benefited scheme after

receipt of the repayment is to be reduced (but not below nil) by the

amount of the repayment.

      (3)  

If the amount of the repayment exceeds the reduction under sub-

paragraph (2), the excess is to be set sequentially until exhausted

against the amounts crystallised by subsequent benefit

crystallisation events occurring in respect of the individual and a

benefited scheme.

      (4)  

In sub-paragraphs (2) and (3) “benefited scheme” means—

(a)    

the scheme to which the repayment is made, and

(b)    

any other pension scheme if as a result of a recognised

transfer, or a chain of two or more recognised transfers,

sums or assets representing the repayment are held for the

purposes of, or represent rights under, that other scheme.””

Committee of the whole House Proceedings: 25 April 2017      

14

Finance (No. 2) Bill, continued

Chancellor of the Exchequer

Agreed to  43

Schedule  4,  page  188,  line  38,  at end insert—

  “(1A)  

In those Regulations, after regulation 13 insert—

“14    

Claims for repayments of overseas transfer charge

(1)    

This regulation applies where the scheme administrator of a registered

pension scheme becomes aware that the scheme administrator may be

entitled to a repayment under section 244M of the Act in respect of

overseas transfer charge on a transfer.

(2)    

The scheme administrator must, no later than 60 days after the date on

which the scheme administrator becomes aware of that, make a claim

for the repayment to the Commissioners for Her Majesty’s Revenue

and Customs.

(3)    

The claim must provide the following information—

(a)    

the member’s name, date of birth and principal residential

address,

(b)    

the date of the transfer and, if different, the date of the event

triggering payability of the charge on the transfer,

(c)    

the date on which the scheme manager accounted for the

charge on the transfer,

(d)    

why the charge on the transfer has become repayable, and

(e)    

the amount in respect of which the claim is made.

(4)    

In a case where the 60 days mentioned in paragraph (2) ends with a day

earlier than 14 November 2017, paragraph (2) is to be treated as

requiring the claim to be made no later than 14 November 2017.””

Chancellor of the Exchequer

Agreed to  44

Schedule  4,  page  188,  line  39,  leave out “this paragraph” and insert “sub-paragraph

(1)”

Chancellor of the Exchequer

Agreed to  45

Schedule  4,  page  188,  line  42,  at end insert—

    “( )  

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

made by the Commissioners for Her Majesty’s Revenue and Customs under

the powers to make regulations conferred by section 244M(8) of FA 2004.”

Chancellor of the Exchequer

Agreed to  46

Schedule  4,  page  190,  line  3,  at end insert—

  “(4A)  

In regulation 3(3)(a) (reporting duty under regulation 3(2) expires after 10

years from creation of relevant transfer fund), after “beginning” insert “—

(i)    

if the payment is in respect of one or more of the

relevant member’s ring-fenced transfer funds

(whether or not it is also in respect of anything else),

with the key date for that fund or (as the case may be)

the later or latest of the key dates for those funds, and

(ii)    

if the payment is not to any extent in respect of the

relevant member’s ring-fenced transfer funds,”.”