SCHEDULE 1 continued PART 4 continued
Taxation of Pensions BillPage 30
(10)
In subsections (2), (4) and (5), a reference to a qualifying payment
from a fund is a reference to—
(a) payment of income withdrawal from the fund, or
(b)
payment of a short-term annuity purchased using sums or
5assets out of the fund,
but does not include payment at a time when the whole of the fund
represents rights attributable to a disqualifying pension credit.
(11)
In subsection (10) “disqualifying pension credit” is to be read in
accordance with paragraph 2(3) and (4) of Schedule 29.”
(2)
10The amendment made by sub-paragraph (1) has effect for the tax year
2015-16 and subsequent tax years.
66
(1)
Omit section 227A of FA 2004 (annual allowance charge: individuals who
met flexible drawdown conditions).
(2) 15In consequence of sub-paragraph (1)—
(a) in section 227(4) of FA 2004, omit the second sentence, and
(b) omit paragraph 45 of Schedule 16 to FA 2011.
(3)
The amendments made by sub-paragraphs (1) and (2) have effect for the tax
year 2015-16 and subsequent tax years.
67
(1)
20In section 228A of FA 2004 (carry forward of unused annual allowance) after
subsection (7) insert—
“(8)
If, for a tax year preceding the current tax year, the chargeable
amount in the individual’s case was the alternative chargeable
amount—
(a)
25a reference in subsection (3)(a) or (b), (4)(b) or (6)(a) to the
annual allowance for that preceding tax year is a reference to
the alternative annual allowance for that preceding tax year
(see section 227B(2)), and
(b)
a reference in subsection (3)(a) or (b), (4)(b) or (6)(a) to the
30total pension input amount in the case of the individual for
that preceding tax year is a reference to the defined-benefit
input sub-total in the case of the individual for that preceding
tax year (see section 227B(3) to (5)).
(9) Subsection (3) does not apply in relation to a tax year—
(a) 35preceding the current tax year, and
(b) ending not later than 5 April 2015,
if, at any time in that preceding tax year, section 165(3A) or 167(2A)
applied to an arrangement relating to the individual.”
(2)
The amendment made by this paragraph has effect where the current tax
40year is the tax year 2015-16 or a subsequent tax year.
68
In section 237B of FA 2004 (scheme administrator’s co-liability for
individual’s annual allowance charge) after subsection (2) insert—
“(2A)
If the chargeable amount for the tax year in the individual’s case is
the alternative chargeable amount, each of the following is treated as
45being a reference to the amount that the annual allowance charge for
Taxation of Pensions BillPage 31
the tax year would be in the individual’s case if the chargeable
amount were the default chargeable amount—
(a)
the reference in subsection (1)(a) to the amount of the
individual’s liability to the annual allowance charge for the
5tax year, and
(b)
the reference in subsection (3) to the annual allowance charge
arising in the case of the individual.”
69
(1)
In article 25C of the Taxation of Pension Schemes (Transitional Provisions)
Order 2006 (S.I. 2006/572S.I. 2006/572) after paragraph (3) insert—
“(4) 10If—
(a) a stand-alone lump sum is paid—
(i) on or after 6 April 2015,
(ii) to a member of a pension scheme,
(iii) under a money purchase arrangement, and
(iv)
15in circumstances where article 25B(2) (circumstance
A) applies, and
(b) no previous stand-alone lump sum has been paid—
(i) on or after that day,
(ii) to the member,
(iii) 20under a money purchase arrangement, and
(iv) in circumstances where article 25B(2) applies,
subsection (1) of section 227G of the 2004 Act (individual first flexibly
accesses pension rights at earliest time given by the following
subsections of that section) has effect as if there were a subsequent
25subsection of that section stating that the member first flexibly
accesses pension rights immediately before the stand-alone lump
sum is paid.”
(2)
The amendment made by sub-paragraph (1) is to be treated as having been
made by the Treasury under the powers to make orders conferred by section
30283(2) of FA 2004.
70
(1)
In paragraph 3A(3) of Schedule 29 to FA 2004 (pension commencement
35lump sum: when pension scheme is to be treated as making an unauthorised
payment) for the words “1% of the standard lifetime allowance on that day”
substitute “£7,500”.
(2)
The amendment made by sub-paragraph (1) has effect in relation to pension
commencement lump sums paid on or after 6 April 2015.
71
(1)
In paragraph 7(1) of Schedule 29 to FA 2004 (meaning of “trivial
commutation lump sum”)—
Taxation of Pensions BillPage 32
(a) after paragraph (a) insert—
“(aa)
it is paid in respect of a defined benefits
arrangement,”,
(b)
in paragraph (d) (entitlement to benefits must be extinguished) for
5“the member’s entitlement to benefits” substitute “any entitlement to
defined benefits that the member has”, and
(c)
in paragraph (e) (member must have reached 60) for “the age of 60”
substitute “normal minimum pension age (or the ill-health condition
is met)”.
(2)
10The amendments made by sub-paragraph (1) have effect for commutation
periods beginning on or after 6 April 2015 and do so irrespective of whether
the nominated date is before, on or after 6 April 2015.
72
(1)
In article 23C(4) of the Taxation of Pension Schemes (Transitional
Provisions) Order 2006 (S.I. 2006/572S.I. 2006/572) (modifications of Schedule 29 to FA
152004) in the inserted paragraph 7A(1)(b) (member must have reached age 60
for certain sums to be trivial commutation lump sums) for “the age of 60”
substitute “normal minimum pension age (or the ill-health condition is
met)”.
(2) The amendment made by sub-paragraph (1)—
(a)
20has effect for determining whether a lump sum paid on or after 6
April 2015 is within the inserted paragraph 7A, and
(b)
is to be treated as having been made by the Treasury under the
powers to make orders conferred by section 283(2) of FA 2004.
73
(1)
The Registered Pension Schemes (Authorised Payments) Regulations 2009
25(S.I. 2009/1171S.I. 2009/1171) are amended as follows.
(2) For regulation 10 substitute—
A payment by a registered pension scheme to a member which
would be a payment that is described in regulation 11, 11A(1)(a) to
30(c) or 12 but for the continuance after the payment of an annuity if the
member has not previously received a payment, by that scheme,
under this regulation.”
(3)
In each of regulations 11(1)(a), 11A(1)(a) and 12(1)(c) (member must have
reached 60 for certain payments by registered pension scheme to be
35authorised payments) for “the age of 60” substitute “normal minimum
pension age or the ill-health condition is met (see paragraph 1 of Schedule
28)”.
(4) The amendments made by sub-paragraphs (2) and (3)—
(a) have effect for payments made on or after 6 April 2015, and
(b)
40are 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 164(1)(f) and (2) of FA 2004.
74
(1)
Paragraph 20 of Schedule 29 to FA 2004 (trivial commutation lump sum
45death benefit) is amended as follows.
Taxation of Pensions BillPage 33
(2)
In sub-paragraph (1) (definition) for the words from “if” to the end substitute
“if condition A or B is met.”
(3) After sub-paragraph (1) insert—
“(1A) Condition A is that the lump sum—
(a)
5is paid to a dependant entitled under the pension scheme
to pension death benefit in respect of the member, and
(b)
extinguishes the dependant’s entitlement under the
pension scheme to pension death benefit and lump sum
death benefit in respect of the member.
(1B) 10Condition B is that—
(a)
the lump sum is paid after the member’s death to an
individual entitled to be paid a pension under the
scheme—
(i)
which the member was entitled to be paid
15immediately before the member’s death, and
(ii)
which is payable to the individual under pension
rule 2 (see section 165),
(b)
if the pension is an annuity or scheme pension payable by
an insurance company, the lump sum extinguishes all
20entitlements in respect of the member under the contract
concerned, and
(c)
if the pension is a scheme pension payable by the scheme
administrator, the lump sum extinguishes all entitlements
to receive a scheme pension in respect of the member from
25the scheme administrator under pension rule 2.”
(4)
In sub-paragraph (2) (excess over £18,000 not a trivial commutation lump
sum death benefit) for “£18,000” substitute “£30,000”.
(5)
In consequence of sub-paragraph (4), in Schedule 18 to FA 2011 omit
paragraph 6(2).
(6)
30The amendments made by this paragraph have effect in relation to lump
sum death benefits paid on or after 6 April 2015.
75
(1)
In Schedule 29 to FA 2004 (authorised lump sums) omit paragraph 21 (which
has come to have the effect that every winding-up lump sum death benefit
35is also a trivial commutation lump sum death benefit).
(2)
In consequence of sub-paragraph (1), in Schedule 18 to FA 2011 omit
paragraph 7.
76
(1)
In paragraph 7 of Schedule 32 to FA 2004 (benefit crystallisation events 2 and
404: early lifetime annuities) after sub-paragraph (3) insert—
“(4)
Sub-paragraph (5) has effect for the purposes of benefit
crystallisation event 2 as it applies in relation to the individual’s
becoming entitled to the lifetime annuity.
(5) If the total of—
Taxation of Pensions BillPage 34
(a)
the sums applied to purchase the lifetime annuity and any
related dependants’ annuity, and
(b)
the market value, at the time they are applied, of the assets
applied to make the purchase,
5is greater than the amount that would apart from this sub-
paragraph be the amount crystallised by the event, that total is the
amount crystallised by the event.”
(2)
The amendment made by sub-paragraph (1) has effect in relation to a
lifetime annuity if, applying the rule in section 165(3)(b) of FA 2004, the
10annuity is one to which an individual becomes entitled on or after 6 April
2015.
77
(1)
In paragraph 20(4)(a) and (b) of Schedule 36 to FA 2004 (lifetime allowance:
deemed crystallisation: value of rights to pre-5 April 2006 drawdown
15pensions) before “the maximum” insert “80% of”.
(2)
The amendment made by sub-paragraph (1) in relation to paragraph 20(4)(a)
of that Schedule has effect where the benefit crystallisation event mentioned
in the opening words of paragraph 20(2) of that Schedule occurs on or after
6 April 2015.
(3)
20The amendment made by sub-paragraph (1) in relation to paragraph
20(4)(b) of that Schedule has effect where—
(a)
the benefit crystallisation event mentioned in the opening words of
paragraph 20(2) of that Schedule occurs on or after 6 April 2015, and
(b)
section 165(3A) of FA 2004 first applied to the arrangement
25concerned in a drawdown pension year that began on or after 27
March 2014.
78 (1) In Schedule 36 to FA 2004 after paragraph 23 insert—
“23ZA (1) Sub-paragraph (2) applies if—
(a)
30there is a recognised transfer from one registered pension
scheme (“the old scheme”) to another registered pension
scheme (“the new scheme”), and
(b)
as a result of paragraph 21 or the previous operation of
sub-paragraph (2), immediately before the transfer this
35Part (except for section 218(6) and paragraph 19) applied in
relation to all of the transferred sums or assets as if
references to normal minimum pension age were to the
member’s protected pension age as defined by paragraph
22(8) or, as the case may be, paragraph 23(8).
(2)
40This Part (except for section 218(6) and paragraph 19) applies in
relation to—
(a)
the transferred sums or assets while held for the purposes
of an arrangement under the new scheme, and
(b)
any sums or assets held for the purposes of such an
45arrangement that arise, or (directly or indirectly) derive,
from—
Taxation of Pensions BillPage 35
(i) any of the transferred sums or assets, or
(ii) sums or assets which so arise or derive,
as if references to normal minimum pension age were to the
member’s protected pension age as defined by paragraph 22(8) or,
5as the case may be, paragraph 23(8).
(3)
Paragraphs 22(7)(a) and 23(7) have effect as if the benefits or
pensions to which they refer do not include any that are in respect
of sums or assets within sub-paragraph (2)(a) or (b) of this
paragraph.”
(2)
10The amendment made by sub-paragraph (1) has effect in relation to
recognised transfers made on or after 6 April 2015.
79 In FA 2004 after section 273A insert—
(1)
15Subsection (2) applies to a payment by a registered pension scheme
to or in respect of a person who is or has been a member of the
scheme if it is paid in respect of a money purchase arrangement and
is—
(a) a payment of drawdown pension,
(b) 20paid to purchase a short-term annuity,
(c) a payment of dependants’ drawdown pension,
(d) paid to purchase a dependants’ short-term annuity,
(e) a payment of nominees’ drawdown pension,
(f) paid to purchase a nominees’ short-term annuity,
(g) 25a payment of successors’ drawdown pension,
(h) paid to purchase a successors’ short-term annuity,
(i) an uncrystallised funds pension lump sum,
(j) a flexi-access drawdown fund lump sum death benefit,
(k)
a pension commencement lump sum where the person
30becomes entitled to it in connection with becoming entitled to
income withdrawal (or where the person dies after becoming
entitled to it but before becoming entitled to the income
withdrawal in connection with which it was expected that the
person would become entitled to the lump sum), or
(l)
35a trivial commutation lump sum death benefit where
condition B in paragraph 20(1B) of Schedule 29 is met.
(2)
The trustees or managers of the scheme may make the payment
despite any provision of the rules of the scheme (however framed)
prohibiting the making of the payment.”
80 ITEPA 2003 is amended as follows.
81
(1)
Section 579CA as substituted by paragraph 117 of Schedule 45 to FA 2013
(pensions under registered pension schemes: temporary non-residents) is
amended as follows.
Taxation of Pensions BillPage 36
(2)
In subsection (2) (relevant withdrawals treated as accruing in the year of
return from temporary non-residence) at the end insert “, but only if the total
amount of—
“(1)the relevant withdrawals within subsection (3), and
(b)
5the relevant withdrawals (as defined by section 576A(4))
within section 576A(3) for the same temporary period of non-
residence,
exceeds £100,000”.
(3) For subsection (4) (meaning of “relevant withdrawal”) substitute—
“(4) 10A “relevant withdrawal” is—
(a)
any income withdrawal paid to the person from a member’s
flexi-access drawdown fund in respect of an arrangement
relating to the person under a registered pension scheme,
(b)
any dependants’ income withdrawal paid to the person from
15a dependant’s flexi-access drawdown fund in respect of an
arrangement relating to the person under a registered
pension scheme,
(c)
any nominees’ income withdrawal paid to the person from a
nominee’s flexi-access drawdown fund in respect of an
20arrangement relating to the person under a registered
pension scheme,
(d)
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
25pension scheme,
(e)
any payment to the person of a short-term annuity purchased
using sums or assets out of a member’s flexi-access
drawdown fund in respect of an arrangement relating to the
person under a registered pension scheme,
(f)
30any payment to the person of a dependants’ short-term
annuity purchased using sums or assets out of a dependant’s
flexi-access drawdown fund in respect of an arrangement
relating to the person under a registered pension scheme,
(g)
any payment to the person of a nominees’ short-term annuity
35purchased 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,
(h)
any payment to the person of a successors’ short-term
annuity purchased using sums or assets out of a successor’s
40flexi-access drawdown fund in respect of an arrangement
relating to the person under a registered pension scheme,
(i)
any uncrystallised funds pension lump sum paid to the
person in respect of an arrangement relating to the person
under a registered pension scheme, but only so far as section
45579A applies in relation to the sum (see section 636A),
(j)
any income withdrawal, or dependants’ income withdrawal,
paid before 6 April 2015 to the person under a registered
pension scheme in respect of an arrangement relating to the
person under the scheme which at the time of the payment
50was an arrangement to which section 165(3A) or 167(2A) of
FA 2004 applied (flexible drawdown arrangements),
Taxation of Pensions BillPage 37
(k)
any payment to the person of a lifetime annuity or
dependants’ annuity where—
(i)
the annuity is within paragraph 3(1A) or 17(1ZA), as
the case may be, of Schedule 28 to FA 2004,
(ii)
5the terms of the contract under which the annuity is
paid are such that there will or could be decreases in
the amount of the annuity other than decreases from
time to time allowed by regulations under paragraph
3(1)(d) or 17(1)(c), as the case may be, of Schedule 28
10to FA 2004 (and any such regulations are to be treated
as having effect for this purpose), and
(iii)
the annuity is purchased using sums or assets held for
the purposes of a registered pension scheme, or
(l)
any payment to the person of a scheme pension, or
15dependants’ scheme pension, under a money purchase
arrangement under a registered pension scheme where—
(i)
the person first acquired an actual (rather than a
prospective) right to receive the scheme pension on or
after 6 April 2015,
(ii)
20when the person first acquired that actual right, fewer
than 11 other individuals were entitled to the present
payment of a scheme pension, or dependants’ scheme
pension, under the registered pension scheme, and
(iii)
the scheme pension is not payable under an annuity
25contract treated under section 153(8) or (8A) of FA
2004 as having become a registered pension scheme.
(4A)
For the purpose of determining whether the figure specified in
subsection (2) is exceeded, any relevant withdrawal paid in a
currency other than sterling is to be translated into sterling using the
30average exchange rate for the year ending with 31 March in the tax
year in which the relevant withdrawal is paid.”
(4)
In subsection (7) for the definition of “flexible drawdown arrangement”
substitute—
““dependants’ annuity”, “dependant’s flexi-access drawdown
35fund”, “dependants’ scheme pension”, “dependants’ short-
term annuity”, “lifetime annuity”, “member’s flexi-access
drawdown fund”, “money purchase arrangement”,
“nominee’s flexi-access drawdown fund”, “scheme pension”,
“short-term annuity”, “successor’s flexi-access drawdown
40fund” and “uncrystallised funds pension lump sum” have the
same meaning as in Part 4 of FA 2004 (see section 152 of FA
2004 and paragraphs 2, 3, 6, 8A, 16 to 16C, 17, 20, 22A, 27E
and 27K of Schedule 28, and paragraph 4A of Schedule 29, to
FA 2004).”
(5) 45The amendments made by this paragraph come into force on 6 April 2015.
82
(1)
The version of section 579CA which has effect if the year of departure is the
tax year 2012-13 or an earlier tax year (pensions under registered pension
schemes: temporary non-residents) is amended as follows.
(2) In subsection (1)—
Taxation of Pensions BillPage 38
(a)
for “income withdrawal or dependants’ income withdrawal under
the registered pension scheme” substitute “relevant withdrawal paid
to a person”,
(b) omit paragraph (a), and
(c)
5at the end insert “, but only if the total amount of the relevant
withdrawals meeting those conditions, and the relevant withdrawals
(as defined by section 576A(4A)) meeting the conditions in section
576A(1) for the same set of years of non-residence, exceeds £100,000”.
(3) After subsection (3) insert—
“(3A) 10A “relevant withdrawal”, in relation to a person, is—
(a)
any income withdrawal paid to the person from a member’s
flexi-access drawdown fund in respect of an arrangement
relating to the person under a registered pension scheme,
(b)
any dependants’ income withdrawal paid to the person from
15a dependant’s flexi-access drawdown fund in respect of an
arrangement relating to the person under a registered
pension scheme,
(c)
any nominees’ income withdrawal paid to the person from a
nominee’s flexi-access drawdown fund in respect of an
20arrangement relating to the person under a registered
pension scheme,
(d)
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
25pension scheme,
(e)
any payment to the person of a short-term annuity purchased
using sums or assets out of a member’s flexi-access
drawdown fund in respect of an arrangement relating to the
person under a registered pension scheme,
(f)
30any payment to the person of a dependants’ short-term
annuity purchased using sums or assets out of a dependant’s
flexi-access drawdown fund in respect of an arrangement
relating to the person under a registered pension scheme,
(g)
any payment to the person of a nominees’ short-term annuity
35purchased 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,
(h)
any payment to the person of a successors’ short-term
annuity purchased using sums or assets out of a successor’s
40flexi-access drawdown fund in respect of an arrangement
relating to the person under a registered pension scheme,
(i)
any uncrystallised funds pension lump sum paid to the
person in respect of an arrangement relating to the person
under a registered pension scheme, but only so far as section
45579A applies in relation to the sum (see section 636A),
(j)
any income withdrawal, or dependants’ income withdrawal,
paid before 6 April 2015 to the person under a registered
pension scheme in respect of an arrangement relating to the
person under the scheme which at the time of the payment
50was an arrangement to which section 165(3A) or 167(2A) of
FA 2004 applied (flexible drawdown arrangements),
Taxation of Pensions BillPage 39
(k)
any payment to the person of a lifetime annuity or
dependants’ annuity where—
(i)
the annuity is within paragraph 3(1A) or 17(1ZA), as
the case may be, of Schedule 28 to FA 2004,
(ii)
5the terms of the contract under which the annuity is
paid are such that there will or could be decreases in
the amount of the annuity other than decreases from
time to time allowed by regulations under paragraph
3(1)(d) or 17(1)(c), as the case may be, of Schedule 28
10to FA 2004 (and any such regulations are to be treated
as having effect for this purpose), and
(iii)
the annuity is purchased using sums or assets held for
the purposes of a registered pension scheme, or
(l)
any payment to the person of a scheme pension, or
15dependants’ scheme pension, under a money purchase
arrangement under a registered pension scheme where—
(i)
the person first acquired an actual (rather than a
prospective) right to receive the scheme pension on or
after 6 April 2015,
(ii)
20when the person first acquired that actual right, fewer
than 11 other individuals were entitled to the present
payment of a scheme pension, or dependants’ scheme
pension, under the registered pension scheme, and
(iii)
the scheme pension is not payable under an annuity
25contract treated under section 153(8) or (8A) of FA
2004 as having become a registered pension scheme.
(3B)
For the purpose of determining whether the figure specified at the
end of subsection (1) is exceeded, any relevant withdrawal paid in a
currency other than sterling is to be translated into sterling using the
30average exchange rate for the year ending with 31 March in the tax
year in which the relevant withdrawal is paid.”
(4)
In subsection (4) for “income withdrawal or dependants’ income” substitute
“relevant”.
(5)
In subsection (5) for the definition of “flexible drawdown arrangement”
35substitute—
““dependants’ annuity”, “dependant’s flexi-access drawdown
fund”, “dependants’ scheme pension”, “dependants’ short-
term annuity”, “lifetime annuity”, “member’s flexi-access
drawdown fund”, “money purchase arrangement”,
40“nominee’s flexi-access drawdown fund”, “scheme pension”,
“short-term annuity”, “successor’s flexi-access drawdown
fund” and “uncrystallised funds pension lump sum” have the
same meaning as in Part 4 of FA 2004 (see section 152 of FA
2004 and paragraphs 2, 3, 6, 8A, 16 to 16C, 17, 20, 22A, 27E
45and 27K of Schedule 28, and paragraph 4A of Schedule 29, to
FA 2004).”
(6) The amendments made by this paragraph come into force on 6 April 2015.
83
(1)
Section 576A as substituted by paragraph 116 of Schedule 45 to FA 2013
(pensions under relevant non-UK schemes: temporary non-residents) is
50amended as follows.