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SCHEDULE 13 |
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OCCUPATIONAL AND PERSONAL PENSION SCHEMES |
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PART I |
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AMENDMENTS OF THE TAXES ACT 1988 |
| Introductory |
| 1. Amend the Taxes Act 1988 as follows. |
| Exception of certain life policies from chargeable events legislation |
| 2. - (1) Amend section 539 as follows. |
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(2) In subsection (2) (exception for certain policies of life insurance) at the end of paragraph (c) insert "; or |
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(d) to any policy of life insurance held in connection with a personal pension scheme, within the meaning of Chapter IV of Part XIV, for the time being approved under that Chapter". |
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(3) This paragraph has effect for the year 2000-01 and subsequent years of assessment. |
| No charge to tax under section 591C on conversion under Schedule 23ZA |
| 3. - (1) Amend section 591C as follows. |
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(2) In subsection (1) (charge to tax where approval of scheme ceases to have effect) after "ceases to have effect" insert "otherwise than by virtue of paragraph 3(2)(a) of Schedule 23ZA". |
| Definition of "retirement benefits scheme" |
| 4. - (1) Amend section 611 as follows. |
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(2) In subsection (1) (which defines "retirement benefits scheme" for the purposes of Chapter I and specifies certain schemes which are excluded) after "but does not include" insert "(a)" and at the end add "; or |
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(b) any scheme providing such benefits which is an approved personal pension scheme under Chapter IV of this Part". |
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(3) In subsection (3) (power to treat retirement benefits scheme as two or more separate such schemes for the purposes of Chapter I)- |
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(a) omit "retirement benefits" in both places; and |
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(b) after "for the purposes of this Chapter" insert "and Chapter IV of this Part". |
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(4) In subsection (4)(a) (classes or descriptions of employees with different employers) for "employees" substitute "scheme members". |
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(5) In subsection (6) (definition of "scheme member") at the end of paragraph (b) add "; or |
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(c) if the scheme is an approved personal pension scheme under Chapter IV of this Part, any other person who is a member of the scheme.". |
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| Interpretation of Chapter IV of Part XIV |
| 5. - (1) Amend section 630 as follows. |
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(2) In subsection (1) (definitions) in the definition of "approved"- |
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(a) in paragraph (a) (approved schemes), after "scheme" insert "(other than an approved retirement benefits scheme)"; and |
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(b) in paragraph (b) (approved arrangements), after "means" insert "(i)" and at the end of the sub-paragraph so formed add "; or |
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(ii) made in accordance with a scheme which is for the time being an approved converted scheme but which was, when the arrangements were made, an approved retirement benefits scheme;".
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(3) In subsection (1), in the definition of "pension date" after "means" insert "(subject to section 638ZA)". |
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(4) Insert the following definitions at the appropriate places in subsection (1)- |
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"(a) "approved converted scheme" means an approved personal pension scheme which is such a scheme by virtue of paragraph 3(2)(b) of Schedule 23ZA;"; |
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"(b) "approved retirement benefits scheme" means a retirement benefits scheme approved under Chapter I of this Part;"; |
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"(c) "the earnings threshold" for any year of assessment is £3,600;"; |
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"(d) "higher level contributions", in the case of any year of assessment, means contributions in excess of the earnings threshold for the year;"; |
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"(e) "the personal pension fund", in the case of any personal pension arrangement and an individual, means the accrued rights to which the individual is entitled conferring prospective entitlement to benefits under the arrangement;"; |
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"(f) "retirement benefits scheme" has the same meaning as in Chapter I of this Part (see section 611);". |
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(5) After subsection (1) insert- |
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"(1A) The Treasury may by order amend the definition of "the earnings threshold" in subsection (1) above for any year of assessment by varying the amount there specified.". |
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(6) In subsection (2) (annual amount of annuity which would have been purchasable)- |
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(a) in paragraph (a), for the words from "fund" to "him" substitute "personal pension fund"; and |
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"Where a lump sum falls to be paid on the date in question, the reference is to the value of the personal pension fund after allowing for that payment.". |
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(7) Omit subsection (3) (whose effect is reproduced by sub-paragraphs (4)(e) and (6)). |
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(8) Paragraphs (c) and (d) of sub-paragraph (4) have effect for the year 2001-02 and subsequent years of assessment. |
| Approval of personal pension schemes |
| 6. - (1) Amend section 631 as follows. |
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(2) In subsection (2) (discretion to grant or refuse approval, subject to restrictions in sections 632 to 638A) after "638A" add "(and, where applicable, Schedule 23ZA)". |
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(3) After subsection (2) insert- |
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"(2A) An application for approval of a personal pension scheme may, if the Board think fit, be granted subject to conditions.". |
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(4) In subsection (3) (notice of grant or refusal of an application) after "and" insert- |
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"(a) in the case of a grant subject to conditions, the notice shall state that the grant is so subject and shall specify the conditions; and |
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(5) Sub-paragraphs (3) and (4) have effect in relation to applications for approval granted on or after 6th April 2001. |
| Conversion of certain approved retirement benefits schemes |
| 7. After section 631 insert- |
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"Conversion of certain approved retirement benefits schemes. |
631A. Schedule 23ZA to this Act (which makes provision for or in connection with the conversion of certain retirement benefits schemes approved under Chapter I of this Part into personal pension schemes approved under this Chapter) shall have effect.". |
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| Eligibility to make contributions |
| 8. - (1) After section 632 insert- |
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"Eligibility to make contributions. |
632A. - (1) The Board shall not approve a personal pension scheme if it permits, in relation to arrangements made by a member in accordance with the scheme, the acceptance of- |
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(a) contributions by the member, or |
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(b) contributions by an employer of the member, |
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at a time when the member is not eligible to make contributions. |
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(2) The Board shall not approve a personal pension scheme unless it makes provision for ensuring, in relation to any such arrangements, that any contributions accepted at a time when the member is not eligible to make contributions are repaid- |
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(a) to the member, to the extent of his contributions; and |
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(b) as to the remainder, to his employer. |
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(3) The following provisions of this section have effect for determining for the purposes of subsections (1) and (2) above the times at which a member is eligible to make contributions (and, for those purposes, a member is not eligible to make contributions at any other time). |
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(4) A member is eligible to make contributions at any time during a year of assessment for which he has actual net relevant earnings. |
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(5) A member who does not have actual net relevant earnings for a year of assessment ("the relevant year") is eligible to make contributions at any time during that year if- |
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(a) for at least some part of the year he does not hold an office or employment to which section 645 applies; and |
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(b) the condition in any of subsections (6) to (9) below is satisfied. |
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(6) Condition A is that at some time in the relevant year the member is resident and ordinarily resident in the United Kingdom. |
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(7) Condition B is that the member- |
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(a) at some time during the five years of assessment preceding the relevant year, has been resident and ordinarily resident in the United Kingdom; and |
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(b) was resident and ordinarily resident in the United Kingdom when he made the personal pension arrangements in question. |
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(8) Condition C is that at some time in the relevant year the member is a person who performs duties which, by virtue of section 132(4)(a), are treated as being performed in the United Kingdom. |
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(9) Condition D is that at some time in the relevant year the member is the spouse of a person who performs such duties as are mentioned in subsection (8) above.". |
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(2) This paragraph has effect on and after 6th April 2001. |
| Insurance against risks relating to non-payment of contributions |
| 9. - (1) Amend section 633 (benefits allowed to be provided by approved schemes) as follows. |
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(2) Omit subsection (2) (approval of schemes making provision for insurance against certain risks not to be prevented by subsection (1)). |
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(3) This paragraph has effect in relation to insurance under a contract of insurance made on or after 6th April 2001. |