Finance Bill - continued        House of Commons
SCHEDULE 13, OCCUPATIONAL AND PERSONAL PENSION SCHEMES - continued
PART I, AMENDMENTS OF THE TAXES ACT 1988 - continued

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Other restrictions on approval
     13. - (1) Amend section 638 as follows.
 
      (2) In subsection (3)(a) (limit on aggregate contributions in any year) after "does not exceed" insert "the earnings threshold for that year or, if greater,"
 
      (3) In subsection (4) (the permitted maximum) omit-
 
 
    (a) in the words preceding paragraph (a), "the aggregate of";
 
    (b) paragraph (b) (which refers to relief by virtue of section 642, abolished by this Schedule); and
 
    (c) the word "and" immediately preceding that paragraph.
      (4) After subsection (7A) (prohibition of contributions or transfer payments after pension date) insert-
 
 
    "(7B) Subsection (7A) above shall have effect subject to and in accordance with section 638ZA.".
 
      (5) After subsection (8) add-
 
 
    "(9) The Board may only approve a personal pension scheme if it prohibits the acceptance of contributions in any form other than-
 
 
    (a) the payment of monetary sums; or
 
    (b) the transfer, subject to the conditions in subsection (12) below, of eligible shares in a company;
       and any reference in this Chapter to the payment of contributions includes a reference to the making of contributions in accordance with paragraph (b) above.
 
      (10) For the purposes of this Chapter, the amount of a contribution made by way of a transfer of shares shall be the aggregate market value of the shares at the date of the transfer.
 
      (11) For the purposes of subsection (9)(b) above, "eligible shares" means shares-
 
 
    (a) which the member has exercised the right to acquire, or
 
    (b) which have been appropriated to the member,
       in accordance with the provisions of a savings-related share option scheme, an approved profit-sharing scheme or an employee share ownership plan.
 
      (12) The conditions mentioned in subsection (9)(b) above are-
 
 
    (a) in relation to shares which the member has exercised his right to acquire in accordance with the provisions of a savings-related share option scheme, that the transfer of the shares as contributions under the personal pension scheme takes place before the expiry of the period of 90 days following the exercise of that right;
 
    (b) in relation to shares appropriated to the member in accordance with the provisions of an approved profit-sharing scheme or an employee share ownership plan, that the transfer of the shares as contributions under the personal pension scheme takes place before the expiry of the period of 90 days following the date when the member directed the trustees of the approved profit-sharing scheme or employee share ownership plan to transfer the ownership of the shares to him or, if earlier, the release date in relation to the shares.
      (13) In this section-
 
 
    "approved profit-sharing scheme" has the same meaning as in section 186;
 
    "employee share ownership plan" has the same meaning as in Schedule 8 to the Finance Act 2000;
 
    "market value" shall be construed in accordance with section 272 of the Taxation of Chargeable Gains Act 1992;
 
    "savings-related share option scheme" has the same meaning as in Schedule 9 (see paragraph 1(1) of that Schedule).".
      (6) Sub-paragraph (2) has effect for the year 2001-02 and subsequent years of assessment.
 
      (7) Sub-paragraph (3) has effect in relation to contributions paid in the year 2001-02 or any subsequent year of assessment.
 
      (8) Sub-paragraph (5) has effect in relation to contributions in the year 2001-02 or any subsequent year of assessment.
 
 
Multiple pension dates etc
     14. - (1) After section 638 insert-
 
 
"Personal pension arrangements with more than one pension date etc.     638ZA. - (1) This section applies where a personal pension scheme makes provision for a personal pension arrangement under the scheme to make provision-
 
    (a) for the payment of more than one annuity satisfying the conditions in section 634 or 636 (a "qualifying annuity") and for different such annuities to commence, or be capable of commencing, on different days;
 
    (b) for elections such as are mentioned in section 634A(1) or 636A(1) ("elections for deferral") to be capable of being made at different times in relation to different portions of the personal pension fund; and
 
    (c) for a qualifying lump sum to be payable in connection with-
 
      (i) each qualifying annuity (other than one purchased pursuant to section 634A, 636 or 636A); and
 
      (ii) each election for deferral such as is mentioned in section 634A(1).
      (2) The Board shall not refuse to approve a personal pension scheme by reason only that it makes such provision as is mentioned in subsection (1) above if they are satisfied that it makes provision in conformity with the provisions of this section.
 
      (3) In this section-
 
 
    "income withdrawal fund" means a portion of the personal pension fund which is specified or described in an election for deferral as the portion of that fund to which the election relates;
 
    "qualifying lump sum" means a lump sum satisfying the conditions of section 635 (as that section has effect by virtue of and in accordance with this section);
 
    "the relevant date", in relation to any qualifying annuity or election for deferral, means the date determined in accordance with the arrangement on which-
 
      (a) the qualifying annuity commences; or
 
      (b) the member makes the election for deferral.
      (4) In the application of section 635 in relation to a qualifying lump sum, for the condition in subsection (3) there shall be substituted the conditions in subsections (5) and (6) below (as read with subsection (7) below).
 
      (5) The first condition is that the lump sum must not exceed one-third of-
 
 
    (a) the difference between-
 
      (i) the value of the portion of the personal pension fund applied in the provision of the qualifying annuity in connection with which the lump sum is paid, determined as at the date on which that portion is so applied, and
 
      (ii) the value, determined as at that date, of so much of that portion as represents protected rights, or
 
    (b) the value, as at the relevant date, of the income withdrawal fund which relates to the election for deferral in connection with it is paid,
       as the case may be.
 
      (6) The second condition is that the lump sum must not represent any of the value, at the time when the lump sum is paid, of any protected rights.
 
      (7) In subsections (5) and (6) above, "protected rights" means any of the member's rights under the personal pension arrangement which are protected rights for the purposes of the Pension Schemes Act 1993 or the Pension Schemes (Northern Ireland) Act 1993.
 
      (8) Where a qualifying annuity commences, this Chapter and the personal pension scheme concerned shall have effect, as from the relevant date, as if there had been a separate personal pension arrangement and-
 
 
    (a) the annuity, and any qualifying lump sum payable in connection with it, were benefits provided for by that separate arrangement (instead of by the personal pension arrangement by which it was actually provided (in this subsection referred to as "the relevant arrangement"));
 
    (b) the portion of the personal pension fund applied in the provision of the annuity, together with the amount of any qualifying lump sum payable in connection with the annuity, had been the personal pension fund in the case of that separate arrangement (and were excluded from the personal pension fund in the case of the relevant arrangement);
 
    (c) any election for the annuity, or for such a qualifying lump sum, had been made under that separate arrangement (instead of under the relevant arrangement); and
 
    (d) except in the case of an annuity satisfying the conditions in section 636, the relevant date were the pension date in relation to that separate arrangement (and were not, by reference to that annuity, the pension date in relation to the relevant arrangement).
      (9) Where, in the case of any personal pension arrangement (in this subsection referred to as "the relevant arrangement"), an election for deferral is made, this Chapter and the personal pension scheme concerned shall have effect, as from the relevant date, as if there had been, and continued to be, a separate personal pension arrangement and-
 
 
    (a) the income withdrawal fund which relates to the election, together with the amount of any qualifying lump sum payable in connection with the election, had been the personal pension fund in the case of that separate arrangement (and were excluded from the personal pension fund in the case of the relevant arrangement);
 
    (b) the election for deferral, and any election for such a qualifying lump sum, had been made under that separate arrangement (instead of under the relevant arrangement);
 
    (c) the election for deferral had been made in respect of the whole of the income withdrawal fund which relates to the election; and
 
    (d) except in the case of an election such as is mentioned in section 636A(1), the relevant date were the pension date in relation to that separate arrangement (and were not, by reference to that election, the pension date in relation to the relevant arrangement).".
      (2) This paragraph has effect on and after 6th April 2001.
 
 
Tax relief on member's contributions
     15. - (1) Amend section 639 as follows.
 
      (2) For subsections (1) and (2) substitute-
 
    "(1) An individual who pays a contribution under approved personal pension arrangements made by him shall be entitled to relief under this section in respect of the contribution.
 
      (1A) Subsection (1) above is subject to the other provisions of this Chapter.
 
 
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