1 Provision for pension flexibility etc

Schedule 1 has effect. In that Schedule—

• Part 1 contains provision about flexibly accessing certain drawdown
  funds,

• 5Part 2 contains provision about removing certain restrictions relating to
  annuities to which individuals become entitled on or after 6 April 2015,

• Part 3 contains provision about authorising one-off pension payments not
  made through a drawdown fund,

• Part 4 contains provision about charging the annual allowance charge, in
  10cases where an individual has flexibly accessed pension rights, on
  inputs in respect of money purchase arrangements (and some hybrid
  arrangements) so far as they exceed £10,000 in a tax year,

• Part 5 contains further provision in connection with the taxation of
  pensions,

• 15Part 6 contains provision about the giving of information, and

• Part 7 contains provision about overseas pensions.

2 Restriction and reduction of tax charges on certain lump sums

(1) Chapter 5 of Part 4 of FA 2004 (registered pension schemes: tax charges) is
amended as follows.

(2) 20In section 206(1) (special lump sum death benefits charge arises where certain
lump sums are paid by a registered pension scheme) after “registered pension
scheme” insert “in respect of a member who had reached the age of 75 at the
date of the member’s death”.

(3) In section 206(4) (special lump sum death benefits charge: rate of charge) for
25“55%” substitute “45%”.

(4) In section 205A(4) (serious ill-health lump sum charge: rate of charge) for
“55%” substitute “45%”.

(5) The amendments made by this section apply to lump sums paid on or after 6
April 2015.

3 5Death of pension scheme member

Schedule 2 has effect.

4 Citation, interpretation and consequential amendments

(1) This Act may be cited as the Taxation of Pensions Act 2014.

(2) In this Act—

(a) 10“FA”, followed by a year, means the Finance Act of that year, and

(b) “ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003.

(3) The Commissioners for Her Majesty’s Revenue and Customs may by
regulations make such amendments of Part 4 of FA 2004, or Part 9 of ITEPA
2003, as the Commissioners consider appropriate in consequence of this Act.

(4) 15For the purposes of section 282 of FA 2004 and section 1014 of the Income Tax
Act 2007 (orders and regulations), the power under subsection (3) of this
section is treated as a power under Part 4 of FA 2004 (so that section 282, and
not section 1014, applies in relation to regulations made under subsection (3)).

SCHEDULES

Section 1

SCHEDULE 1 Pension flexibility etc

Part 1 5Drawdown pensions

Annual cap on pension drawdown abolished for flexi-access drawdown funds

1 In section 165(1) of FA 2004 (the pension rules) in pension rule 5 (annual cap
on drawdown pension) after “in each drawdown pension year” insert “from,
or under a short-term annuity purchased using sums or assets out of, the
10member’s drawdown pension fund”.

2 In paragraph 8(1A) of Schedule 28 to FA 2004 (meaning of “member’s
drawdown pension fund”: funds designated as available for drawdown)—

(a) in the opening words omit “they”,

(b) in paragraph (a) for “have been designated at any time” substitute
15“they have, at any time before 6 April 2015, been designated”,

(c) before the “or” at the end of paragraph (a) insert—

“(aa) they have, at any time on or after 6 April 2015, been
designated under the arrangement as available for
the payment of drawdown pension, and—

(i) 20sums or assets held for the purposes of the
arrangement have, at any time before 6
April 2015, been designated under the
arrangement as so available, and

(ii) section 165(3A) did not apply to the
25arrangement immediately before 6 April
2015,”, and

(d) in paragraph (b)—

(i) at the beginning insert “they”, and

(ii) for “sums or assets which have been so designated or”
30substitute “member-designated funds under paragraph (a) or
(aa) or from sums or assets”.

Flexi-access drawdown funds

3 (1) In Schedule 28 to FA 2004 after paragraph 8 insert—

“Member’s flexi-access drawdown fund

8A (1) For the purposes of this Part the member’s flexi-access drawdown
5fund in respect of an arrangement consists of such of the sums or
assets held for the purposes of the arrangement as are newly-
designated funds.

(2) For the purposes of this Part sums or assets held for the purposes
of an arrangement are newly-designated funds if—

(a) 10they—

(i) have, at any time on or after 6 April 2015, been
designated under the arrangement as available for
the payment of drawdown pension, and

(ii) are not member-designated funds, or

(b) 15they were member-designated funds immediately before 6
April 2015 and section 165(3A) applied to the arrangement
at that time, or

(c) they have become newly-designated funds by the
operation of paragraph 8B, 8C or 8D, or

(d) 20they arise, or (directly or indirectly) derive, from newly-
designated funds under paragraph (a), (b) or (c) or from
sums or assets which so arise or derive.

(3) Any sums or assets that become newly-designated funds under
sub-paragraph (2)(b) cease to be member-designated funds as
25from the start of 6 April 2015.

Conversion of certain drawdown pension funds into flexi-access drawdown funds

8B (1) Sub-paragraph (2) applies if—

(a) a member’s drawdown pension fund in respect of an
arrangement came into being before 6 April 2015,

(b) 30section 165(3A) did not apply to the arrangement
immediately before 6 April 2015, and

(c) at a time on or after 6 April 2015, a payment—

(i) of income withdrawal from the fund, or

(ii) of a short-term annuity purchased using sums or
35assets out of the fund,

is made that (apart from sub-paragraph (2)) would breach
the cap.

(2) The sums and assets that make up the fund immediately before
the payment is made become newly-designated funds
40immediately before the payment is made (so that the payment is
made out of the member’s flexi-access drawdown fund in respect
of the arrangement and therefore is not part of the total capped by
pension rule 5).

(3) For the purposes of sub-paragraph (1)(c), a payment of drawdown
45pension in respect of an arrangement is one that would breach the

cap if, when its amount is added to the amounts of any drawdown
pension in respect of the arrangement—

(a) paid—

(i) before it is made, but

(ii) 5in the same drawdown pension year in respect of
the arrangement, or

(b) paid at the time it is made,

the total is greater than the cap set by pension rule 5 for that
drawdown pension year.

8C (1) 10Sub-paragraph (2) applies if—

(a) a member’s drawdown pension fund in respect of an
arrangement came into being before 6 April 2015,

(b) section 165(3A) did not apply to the arrangement
immediately before 6 April 2015, and

(c) 15the member notifies the scheme administrator that the
member wishes the fund to become the member’s flexi-
access drawdown fund in respect of the arrangement.

(2) At—

(a) the time the scheme administrator accepts the notification,
20or

(b) the start of 6 April 2015 if that is later,

the sums and assets that then make up that fund become newly-
designated funds, if they have not previously done so by the
operation of paragraph 8B.

8D (1) 25Sub-paragraphs (2) and (3) apply if—

(a) there is a recognised transfer from one registered pension
scheme (“the old scheme”) to another registered pension
scheme (“the new scheme”) of member-designated funds
held for the purposes of an arrangement under the old
30scheme, and

(b) the sums or assets transferred are, under the arrangement
under the new scheme for whose purposes they are first
held after the transfer, designated as available for the
payment of drawdown pension.

(2) 35If the member, when or before making the designation, notifies the
scheme administrator of the new scheme that the member wishes
the sums or assets to be newly-designated funds, the sums or
assets become newly-designated funds and do so—

(a) when the designation is made, or

(b) 40if later, immediately after the transfer,

except that, if both the designation and transfer are made before 6
April 2015, the sums or assets become newly-designated funds at
the start of 6 April 2015.

(3) If sub-paragraph (2) does not provide for the sums or assets to
45become newly-designated funds, the sums or assets become
member-designated funds and do so—

(a) when the designation is made, or

(b) if later, immediately after the transfer.”

(2) Sub-paragraph (1), so far as it inserts the new paragraph 8D, has effect in
relation to—

(a) cases where both the designation and transfer are made after the end
of 2 months beginning with the day on which this Act is passed, and

(b) 5cases not within paragraph (a) where—

(i) the transfer is made before 6 April 2015 and the designation
is made on or after 6 April 2015, or

(ii) the designation is made before 6 April 2015 and the transfer
is made on or after 6 April 2015.

4 (1) 10In Schedule 28 to FA 2004 after paragraph 22 insert—

“Dependant’s flexi-access drawdown fund

22A (1) For the purposes of this Part a dependant’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-
15designated dependant funds.

(2) For the purposes of this Part sums or assets held for the purposes
of an arrangement are newly-designated dependant funds if—

(a) they—

(i) have, at any time on or after 6 April 2015, been
20designated under the arrangement as available for
the payment of dependants’ drawdown pension,
and

(ii) are not dependant-designated funds, or

(b) they were dependant-designated funds immediately
25before 6 April 2015 and section 167(2A) applied to the
arrangement at that time, or

(c) they have become newly-designated dependant funds by
the operation of paragraph 22B, 22C or 22D, or

(d) they arise, or (directly or indirectly) derive, from newly-
30designated dependant funds under paragraph (a), (b) or
(c) or from sums or assets which so arise or derive.

(3) Any sums or assets that become newly-designated dependant
funds under sub-paragraph (2)(b) cease to be dependant-
designated funds as from the start of 6 April 2015.

35Conversion of certain dependants’ drawdown funds into flexi-access drawdown funds

22B (1) Sub-paragraph (2) applies if—

(a) a dependant’s drawdown pension fund in respect of an
arrangement came into being before 6 April 2015,

(b) section 167(2A) did not apply to the arrangement
40immediately before 6 April 2015, and

(c) at a time on or after 6 April 2015, a payment—

(i) of dependants’ income withdrawal from the fund,
or

(ii) of a dependants’ short-term annuity purchased
45using sums or assets out of the fund,

is made that (apart from sub-paragraph (2)) would breach
the cap.

(2) The sums and assets that make up the fund immediately before
the payment is made become newly-designated dependant funds
5immediately before the payment is made (so that the payment is
made out of the dependant’s flexi-access drawdown fund in
respect of the arrangement and therefore is not part of the total
capped by pension death benefit rule 4).

(3) For the purposes of sub-paragraph (1)(c), a payment of
10dependants’ drawdown pension in respect of an arrangement is
one that would breach the cap if, when its amount is added to the
amounts of any dependants’ drawdown pension in respect of the
arrangement—

(a) paid—

(i) 15before it is made, but

(ii) in the same drawdown pension year in respect of
the arrangement, or

(b) paid at the time it is made,

the total is greater than the cap set by pension death benefit rule 4
20for that drawdown pension year.

22C (1) Sub-paragraph (2) applies if—

(a) a dependant’s drawdown pension fund in respect of an
arrangement came into being before 6 April 2015,

(b) section 167(2A) did not apply to the arrangement
25immediately before 6 April 2015, and

(c) the dependant notifies the scheme administrator that the
dependant wishes the fund to become the dependant’s
flexi-access drawdown fund in respect of the arrangement.

(2) At—

(a) 30the time the scheme administrator accepts the notification,
or

(b) the start of 6 April 2015 if that is later,

the sums and assets that then make up that fund become newly-
designated dependant funds, if they have not previously done so
35by the operation of paragraph 22B.

22D (1) Sub-paragraphs (2) and (3) apply if—

(a) there is a recognised transfer from one registered pension
scheme (“the old scheme”) to another registered pension
scheme (“the new scheme”) of dependant-designated
40funds held for the purposes of an arrangement under the
old scheme, and

(b) the sums or assets transferred are, under the arrangement
under the new scheme for whose purposes they are first
held after the transfer, designated as available for the
45payment of drawdown pension.

(2) If the dependant, when or before the designation is made, notifies
the scheme administrator of the new scheme that the dependant
wishes the sums or assets to be newly-designated dependant

funds, the sums or assets become newly-designated dependant
funds and do so—

(a) when the designation is made, or

(b) if later, immediately after the transfer,

5except that, if both the designation and transfer are made before 6
April 2015, the sums or assets become newly-designated
dependant funds at the start of 6 April 2015.

(3) If sub-paragraph (2) does not provide for the sums or assets to
become newly-designated dependant funds, the sums or assets
10become dependant-designated funds and do so—

(a) when the designation is made, or

(b) if later, immediately after the transfer.”

(2) Sub-paragraph (1), so far as it inserts the new paragraph 22D, has effect in
relation to—

(a) 15cases where both the designation and transfer are made after the end
of 2 months beginning with the day on which this Act is passed, and

(b) cases not within paragraph (a) where—

(i) the transfer is made before 6 April 2015 and the designation
is made on or after 6 April 2015, or

(ii) 20the designation is made before 6 April 2015 and the transfer
is made on or after 6 April 2015.

Further drawdown amendments

5 FA 2004 is amended as follows.

6 In section 167(1) (the pension death benefit rules) in pension death benefit
25rule 4 (annual cap on dependants’ drawdown pension) after “in each
drawdown pension year” insert “from, or under a dependants’ short-term
annuity purchased using sums or assets out of, the dependant’s drawdown
pension fund”.

7 In section 168(1), in the lump sum death benefit rule, after paragraph (e)
30insert—

“(ea) a flexi-access drawdown fund lump sum death benefit,”.

8 In section 169(1D) (regulations about transfers of drawdown funds) after
paragraph (a) insert “or

(aa) a member’s flexi-access drawdown fund or dependant’s
35flexi-access drawdown fund,”.

9 In section 172B(2) (rights of a “relevant member”)—

(a) omit the “or” at the end of paragraph (aa), and

(b) after paragraph (b) insert “, or

(c) rights representing the member’s flexi-access
40drawdown fund or dependant’s flexi-access
drawdown fund in respect of an arrangement under
the pension scheme.”

10 In section 172B(7A) (section does not apply to certain increases in rights)
after “dependant’s drawdown pension fund” (in both places) insert “or
45dependant’s flexi-access drawdown fund”.

11 In section 182(3) (value of arrangement for purposes of borrowing limits)—

(a) after paragraph (a) insert—

“(aa) the amount of such of the sums and the market value
of such of the assets as represent the member’s flexi-
5access drawdown fund in respect of the arrangement
(if any),”, and

(b) in paragraph (b) after “dependants’ drawdown pension funds”
insert “or dependants’ flexi-access drawdown funds”.

12 In section 182(5) (determining whether rights are uncrystallised) after “the
10person’s drawdown pension fund” insert “or the person’s flexi-access
drawdown fund”.

13 In section 206(1) (payments which trigger special lump sum death benefits
charge)—

(a) omit the “or” at the end of paragraph (b), and

(b) 15after paragraph (c) insert “or

(d) a flexi-access drawdown fund lump sum death
benefit,”.

14 In section 211(1) (value of crystallised rights for purposes of section 210)—

(a) omit the “and” at the end of paragraph (a), and

(b) 20after paragraph (b) insert “, and

(c) the aggregate of the amount of the sums, and the
market value of the assets, representing the member’s
flexi-access drawdown fund in respect of the
arrangement on that date (if any).”

15 25In section 212(2) (value of uncrystallised rights for purposes of section 210:
rights which are not uncrystallised) after “the member’s drawdown pension
fund” insert “or the member’s flexi-access drawdown fund”.

16 In section 216(1) (benefit crystallisation events and amounts crystallised), in
column 2 of the entry in the table for benefit crystallisation event 5A, after
30“representing the individual’s drawdown pension fund under the
arrangement” insert “(if any), plus the aggregate of the amount of the sums
and the market value of the assets representing the individual’s flexi-access
drawdown fund under the arrangement (if any),”.

17 In section 273A(1) (regulations about certain payments by insurance
35companies)—

(a) omit the “or” at the end of paragraph (b), and

(b) after paragraph (c) insert “or

(d) a flexi-access drawdown fund lump sum death
benefit,”.

18 40In section 280(2) (index of defined expressions) at the appropriate places
insert—

19 In paragraph 7 of Schedule 28 (meaning of “income withdrawal”) at the end
insert “or from the member’s flexi-access drawdown fund in respect of an
5arrangement”.

20 In paragraph 21 of Schedule 28 (meaning of “dependants’ income
withdrawal”) at the end insert “or from the dependant’s flexi-access
drawdown fund in respect of an arrangement”.

21 In paragraph 22(2) of Schedule 28 (meaning of “dependant’s drawdown
10pension fund”: funds designated as available for dependants’ drawdown
pension)—

(a) in the opening words omit “they”,

(b) in paragraph (a) for “have been designated at any time” substitute
“they have, at any time before 6 April 2015, been designated”,

(c) 15before the “or” at the end of paragraph (a) insert—

“(aa) they have, at any time on or after 6 April 2015, been
designated under the arrangement as available for
the payment of dependants’ drawdown pension to
the dependant, and—

(i) 20sums or assets held for the purposes of the
arrangement have, at any time before 6
April 2015, been designated under the
arrangement as so available, and

(ii) section 167(2A) did not apply to the
25arrangement immediately before 6 April
2015,”, and

(d) in paragraph (b)—

(i) at the beginning insert “they”, and

(ii) for “sums or assets which have been so designated or”
30substitute “dependant-designated funds under paragraph (a)
or (aa) or from sums or assets”.

22 In paragraph 3(5)(a) and (8)(a) of Schedule 29 (deductions when calculating
“applicable amount”) after “of the member’s drawdown pension fund”
insert “or of the member’s flexi-access drawdown fund”.

23 35In paragraph 17 of Schedule 29 (meaning of “drawdown pension fund lump
sum death benefit”)—

(a) in sub-paragraph (1)(a) for “under” substitute “to be paid from the
member’s drawdown pension fund in respect of”, and

(b) in sub-paragraph (2)(c) after “at the date of the dependant’s death”
40insert “to be paid from the dependant’s drawdown pension fund”.

24 In Schedule 29 after paragraph 17 insert—

“Flexi-access drawdown fund lump sum death benefit

17A (1) For the purposes of this Part a lump sum death benefit is a flexi-
access drawdown fund lump sum death benefit if—

(a) 45it is paid in respect of income withdrawal to which the
member was entitled to be paid from the member’s flexi-

access drawdown fund in respect of an arrangement at the
date of the member’s death, and

(b) it is not a charity lump sum death benefit.

(2) A lump sum death benefit is also a flexi-access drawdown fund
5lump sum death benefit if—

(a) it is paid on the death of a dependant of the member,

(b) it is paid in respect of dependants’ income withdrawal to
which the dependant was at the date of the dependant’s
death entitled to be paid from the dependant’s flexi-access
10drawdown fund in respect of an arrangement relating to
the member, and

(c) it is not a charity lump sum death benefit.

(3) A lump sum death benefit is also a flexi-access drawdown fund
lump sum death benefit if—

(a) 15it 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
20the member, and

(c) it is not a charity lump sum death benefit.

(4) 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) 25it 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) 30it is not a charity lump sum death benefit.

(5) But if the amount of a lump sum falling within sub-paragraph (1),
(2), (3) or (4) exceeds the permitted maximum, the excess is not a
flexi-access drawdown fund lump sum death benefit.

(6) The permitted maximum is the aggregate of—

(a) 35the amount of the sums, and

(b) the market value of the assets,

representing the member’s, dependant’s, nominee’s or
successor’s flexi-access drawdown fund in respect of the
arrangement immediately before the payment is made.”

25 40In paragraph 18 of Schedule 29 (meaning of “charity lump sum death
benefit”)—

(a) in sub-paragraph (1)(c) after “in respect of an arrangement” insert
“, or in respect of the member’s flexi-access drawdown fund in
respect of an arrangement,”,

(b) 45in sub-paragraph (2)(d) after “dependant’s drawdown pension
fund” insert “, or the dependant’s flexi-access drawdown fund,”, and

(c) in sub-paragraph (4) after “drawdown pension fund” insert “, or
flexi-access drawdown fund,”.

26 In paragraph 4(1) of Schedule 32 (supplementary provision about benefit
crystallisation event 4) at the end insert “or flexi-access drawdown fund”.

27 In paragraph 17(2) of Schedule 32 (supplementary provision about benefit
crystallisation event 8) after “the individual’s drawdown pension fund”
5insert “or flexi-access drawdown fund”.

28 (1) In paragraph 20(4) of Schedule 36 (lifetime allowance: deemed
crystallisation: value of rights to pre-5 April 2006 drawdown pensions)—

(a) in paragraph (b) (arrangements where section 165(3A) of FA 2004
applies) for “applies” substitute “applied at any time before 6 April
102015”, and

(b) after paragraph (b) insert “, or

(c) in the case of an arrangement to which section
165(3A) never applied but only if the time falls after
the member’s drawdown pension fund in respect of
15the arrangement is converted into the member’s flexi-
access drawdown fund in respect of the arrangement
by the operation of any of paragraphs 8B to 8D of
Schedule 28, 80% of the maximum amount that could
have been paid in accordance with pension rule 5 in
20the drawdown pension year in which the conversion
occurs had no conversion happened in that year by
the operation of any of paragraphs 8B to 8D of
Schedule 28.”

(2) The amendments made by sub-paragraph (1) come into force on 6 April
252015.

29 In paragraph 29(3) of Schedule 36 (modifications of paragraph 3 of Schedule
29 for cases involving protected lump sum rights), in the sub-paragraph
(5)(a) treated as substituted in paragraph 3 of Schedule 29, after “member’s
drawdown pension fund” insert “or flexi-access drawdown fund”.

30Related amendment in the Pension Benefits Regulations 2006

30 (1) In regulation 2(1) of the Pension Benefits (Insurance Company Liable as
Scheme Administrator) Regulations 2006 (S.I. 2006/136S.I. 2006/136) (payments in
relation to which the insurance company is liable as scheme
administrator)—

(a) 35omit the “or” at the end of sub-paragraph (b), and

(b) after sub-paragraph (c) insert “, or

“(d) a flexi-access drawdown fund lump sum death benefit.”

(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 in
40exercise of their powers under section 273A of FA 2004 (as amended by this
Schedule).

Related amendment in Part 9 of ITEPA 2003

31 In section 636A of ITEPA 2003 (taxation of pension lump sums)—

(a) in subsection (4) (lump sum taxable under section 206 of FA 2004 but
45not otherwise) omit the “or” at the end of paragraph (b), and after

paragraph (c) insert “or

(d) a flexi-access drawdown fund lump sum death
benefit,”, and

(b) in subsection (7) (definitions) after ““drawdown pension fund lump
5sum death benefit”,” insert—

• ““flexi-access drawdown fund lump sum death
  benefit”,”.

Repeal and revocation of provisions relating to pre-6 April 2015 flexible drawdown

32 (1) In FA 2004 omit—

(a) 10in section 165(1), in pension rule 5, the second sentence,

(b) section 165(3A) and (3B),

(c) in section 167(1), in pension death benefit rule 4, the second sentence,

(d) section 167(2A) and (2B),

(e) in Schedule 28—

(i) 15paragraph 10(11),

(ii) paragraph 10A(11),

(iii) paragraphs 14A to 14E,

(iv) paragraph 24(11),

(v) paragraph 24A(9), and

(vi) 20paragraphs 24C to 24G, and

(f) in Schedule 34, paragraph 4A.

(2) In consequence of sub-paragraph (1), in Schedule 16 to FA 2011 omit
paragraphs 1(3), 8(12), 10, 11(3), 18(12), 20 and 81(3).

(3) The Registered Pension Schemes (Prescribed Requirements of Flexible
25Drawdown Declaration) Regulations 2011 (S.I. 2011/1792S.I. 2011/1792) are revoked.

(4) The amendments made by sub-paragraphs (1) to (3) come into force on 6
April 2015.

Related amendments in regulations

33 (1) The Pension Schemes (Application of UK Provisions to Relevant Non-UK
30Schemes) Regulations 2006 (S.I. 2006/207S.I. 2006/207) are amended as follows.

(2) In regulations 6 and 7 omit paragraph (b) and the “and” preceding it.

(3) In regulation 14(3)—

(a) after paragraph (b) insert—

“(ba) paragraphs 8C and 8D (in each place where the
35expression occurs);”,

(b) omit paragraph (da),

(c) after paragraph (e) insert—

“(ea) paragraphs 22C and 22D (in each place where the
expression occurs);”, and

(d) 40omit paragraph (fc).

(4) The amendments made by sub-paragraphs (2) and (3) come into force on 6
April 2015.

(5) The amendments made by sub-paragraph (3)(a) and (c) are to be treated as
having been made by the Commissioners for Her Majesty’s Revenue and
Customs under such of the powers conferred on them by Schedule 34 to FA
2004 (as amended by this Schedule) as are applicable.

34 (1) 5Regulation 12 of the Registered Pension Schemes (Transfer of Sums and
Assets) Regulations 2006 (S.I. 2006/499S.I. 2006/499) (drawdown funds—recognised
transfers) is amended as follows.

(2) In the heading after “fund” (in both places) insert “or flexi-access drawdown
fund”.

(3) 10In paragraph (1) (transfer recognised only if transferred items are only items
held under arrangement to which transfer made) after “represent a” insert
“member’s flexi-access drawdown fund, dependant’s flexi-access
drawdown fund,”.

(4) In paragraph (2) (transferred items treated for certain purposes as remaining
15held under fund from which transfer made) before sub-paragraph (a)
insert—

“(za) in the case of a member’s flexi-access drawdown fund, in the
entries in table 3 for provisions not in Schedule 28,”.

(5) In table 3, in the heading, after “Prescribed purposes—” insert “member’s
20flexi-access drawdown fund or”.

(6) In table 3 omit the entry for section 165(3A) of FA 2004.

(7) In table 4 omit the entry for section 167(2A) of FA 2004.

(8) The amendments made by this paragraph—

(a) come into force on 6 April 2015, and

(b) 25are to be treated as having been made by the Commissioners for
Revenue and Customs under the powers to make regulations
conferred by section 169(1D) and (1E) of FA 2004 (as amended by this
Schedule).

35 (1) The Registered Pension Schemes (Provision of Information) Regulations
302006 (S.I. 2006/567S.I. 2006/567) are amended as follows.

(2) In the table in regulation 3(1), omit the entry for reportable event 21
(reporting that section 165(3A) or 167(2A) of FA 2004 applies).

(3) Omit regulation 5B (reports for the tax year 2011-12).

(4) In regulation 16(1) (information for insurance company provided with
35funds otherwise than from a drawdown pension fund) after “drawdown
pension fund” insert “or flexi-access drawdown fund”.

(5) In regulation 17(1) (information for insurance company provided with
funds from a drawdown pension fund) after “drawdown pension fund”
insert “or flexi-access drawdown fund”.

(6) 40In regulation 17(2) and (4) after “of the member’s drawdown pension fund”
insert “or of the member’s flexi-access drawdown fund”.

(7) The amendments made by sub-paragraphs (4) to (6) are 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
45Regulations as are applicable.

(8) In consequence of sub-paragraph (2), omit regulation 4(9) of the Registered
Pension Schemes (Provision of Information) (Amendment) (No. 2)
Regulations 2011 (S.I. 2011/1797S.I. 2011/1797).

(9) In consequence of sub-paragraph (3), omit regulation 5 of those 2011
5Regulations.

(10) The amendments made by sub-paragraphs (2) and (8) have effect in relation
to reports for the tax year 2015-16 and subsequent tax years.

(11) The amendments made by sub-paragraphs (3) and (9) come into force on 6
April 2015 but without prejudice to the continued operation of the revoked
10provisions in relation to reports for the tax year 2011-12.

(12) The amendments made by sub-paragraphs (4) to (6) come into force on 6
April 2015.

Part 2 Annuities

15Reduction of restrictions on new annuities

36 Schedule 28 to FA 2004 (registered pension schemes) is amended as follows.

37 In paragraph 3 (definition of member’s lifetime annuity) after sub-
paragraph (1) insert—

“(1A) For the purposes of this Part, but subject to any provision made
20under sub-paragraph (2C)(za), an annuity payable to the member
is also a lifetime annuity if—

(a) it is payable by an insurance company,

(b) the member becomes entitled to it on or after 6 April 2015,
and

(c) 25it is payable until the member’s death or until the later of
the member’s death and the end of a term certain.”

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

“(1ZA) For the purposes of this Part, but subject to any provision made
30under sub-paragraph (1C)(za), an annuity payable to the member
is also a short-term annuity if—

(a) it is purchased by the application of sums or assets
representing the whole or any part of the member’s
drawdown pension fund, or of the member’s flexi-access
35drawdown fund, in respect of an arrangement,

(b) it is payable by an insurance company,

(c) the member becomes entitled to it on or after 6 April 2015,
and

(d) it is payable for a term which does not exceed five years.”

39 40In paragraph 17 (definition of dependants’ annuity) after sub-paragraph (1)

insert—

“(1ZA) For the purposes of this Part, but subject to any provision made
under sub-paragraph (4)(za), an annuity payable to a dependant is
also a dependants’ annuity if—

(a) 5either—

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

(ii) 10it is purchased after the member’s death and the
dependant becomes entitled to it on or after 6 April
2015,

(b) it is payable by an insurance company,

(c) where the dependant is not the member’s child, it is
15payable until the dependant’s death or until the earliest of
the dependant’s marrying, entering into a civil partnership
or dying, and

(d) where the dependant is the member’s child, it is payable
until the earlier of the dependant’s ceasing to be a
20dependant or dying, or until the earliest of the dependant’s
marrying, entering into a civil partnership, ceasing to be a
dependant or dying.”

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

“(1ZA) 25For the purposes of this Part, but subject to any provision made
under sub-paragraph (1C)(za), an annuity payable to a dependant
is also a dependants’ short-term annuity if—

(a) it is purchased by the application of sums or assets
representing the whole or any part of the dependant’s
30drawdown pension fund, or of the dependant’s flexi-
access drawdown fund, in respect of an arrangement,

(b) it is payable by an insurance company,

(c) the dependant becomes entitled to it on or after 6 April
2015, and

(d) 35it is payable for a term which does not exceed five years
and ends before the dependant dies.”

Further annuities amendments

41 In section 165(1) of FA 2004 (the pension rules) in pension rule 2 (death of a
member)—

(a) 40in the first sentence after “an annuity,” insert “and if in the case of an
annuity that day was before 6 April 2015,”,

(b) after that sentence insert—

“If the member becomes entitled to an annuity on or after 6
April 2015 and the annuity is payable until the later of the
45member’s death and the end of a term certain, payment of the
annuity may continue to be made (to any person) until the
end of that term.”, and

(c) in the final sentence for “But no other” substitute “Except as
provided by the preceding provisions of this rule, no”.

42 Schedule 28 to FA 2004 (registered pension schemes) is further amended as
follows.

43 In paragraph 3(1) (definition of member’s lifetime annuity) after paragraph
(b) insert—

“(ba) 5the member becomes entitled to it before 6 April 2015,”.

44 (1) In paragraph 3(2C) (regulations for cases where lifetime annuity ceases and
funds are transferred)—

(a) before paragraph (a) insert—

“(za) in a case where—

(i) 10a new annuity becomes payable,

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