Finance Bill

House of Commons

Session 2003 - 04
Internet Publications
Other Bills before Parliament

Finance Bill

Finance Bill
Part 4 — Pension schemes etc
Chapter 8 — Supplementary
216

active member (of a pension scheme)
section 141(2)

active membership period (in sections
section 210(4) and (5)

210 to 212)

amount crystallised
section 205

annual allowance
section 217

5

annual allowance charge
section 216(1)

annuity protection lump sum death
paragraph 16 of

benefit
Schedule 29

arrangement
section 142(1)

authorised surplus payment
section 166

10

available (in relation to the individual’s
section 208

lifetime allowance)

basic rate
section 832(1) of ICTA

basic rate limit
section 832(1) of ICTA

benefits (provided by pension scheme)
section 265(2)

15

benefit crystallisation event
section 205

the Board of Inland Revenue
section 265(1)

borrowing (in Chapter 3)
section 153

cash balance arrangement
section 142(3)

cash balance benefits
section 142(5)

20

chargeable gain
section 832(1) of ICTA

charity
section 265(1)

company
section 832(1) of ICTA

compensation payment
section 167

contribution
sections 177(4) to (6)

25

and 184

defined benefits
section 142(7)

defined benefits arrangement
section 142(6)

defined benefits lump sum death
paragraph 13 of

benefit
Schedule 29

30

dependant’s alternatively
paragraph 25 of

secured pension fund
Schedule 28

dependants’ scheme pension
paragraph 16 of

Schedule 28

Finance Bill
Part 4 — Pension schemes etc
Chapter 8 — Supplementary
217

dependant’s unsecured pension fund
paragraph 22 of

Schedule 28

employee and employer (and
section 265(1)

employment)

employment income
section 7(2) of ITEPA

5

2003

enhanced lifetime allowance
section 243(2)

regulations

entitled (in relation to a lump sum)
section 156(2)

entitled (in relation to a pension)
section 155(3)

10

higher rate
section 832(1) of ICTA

hybrid arrangement
section 142(8)

ill-health condition
paragraph 1 of

Schedule 28

the individual (in sections 204 to 208)
section 203(5)

15

individual’s lifetime allowance
section 207

the Inland Revenue
section 265(1)

insurance company
section 262

investments (in relation to a pension
section 175(3) and (4)

scheme)

20

liability (in Chapter 3)
section 153

lifetime allowance charge
section 203(1)

lifetime allowance enhancement factors
section 207(5)

lifetime allowance excess lump sum
paragraph 11 of

Schedule 29

25

lifetime annuity
paragraph 3 of

Schedule 28

loan (in Chapter 3)
section 152

lump sum death benefit
section 158(2)

market value
section 264

30

member (of a pension scheme)
section 141(1)

member’s alternatively
paragraph 11 of

secured pension fund
Schedule 28

member’s unsecured pension fund
paragraph 8 of

Schedule 28

35

Finance Bill
Part 4 — Pension schemes etc
Chapter 8 — Supplementary
218

money purchase arrangement
section 142(2)

money purchase benefits
section 142(4)

net pay pension scheme
section 180(9)

normal minimum pension age
section 265(1)

occupational pension scheme
section 140(5)

5

overseas arrangement active
section 213(7) and (8)

membership period (in sections 210 to

212)

payment (in Chapter 3)
section 151

payments (made by pension scheme)
section 265(2)

10

pension
section 155(2)

pension commencement lump sum
paragraph 1 of

Schedule 29

pension credit and pension debit
section 265(1)

pension input amount
section 218

15

pension input period
section 227

pension protection lump sum death
paragraph 14 of

benefit
Schedule 29

pension scheme
section 140(1)

the pension scheme (in sections 204 to
section 203(5)

20

208)

pension sharing order or provision
section 265(1)

pensioner member (of a pension
section 141(3)

scheme)

period of account
section 832(1) of ICTA

25

personal representatives
section 265(1)

property investment LLP
section 842B of ICTA

public service pension scheme
section 140(3)

recognised overseas pension scheme
section 140(7)

recognised overseas scheme
section 213(2) and (3)

30

arrangement (in sections 213 to 215)

registered pension scheme
section 140(2)

relevant overseas individual
section 210(3)

relevant UK earnings
section 178(2)

Finance Bill
Part 4 — Pension schemes etc
Chapter 8 — Supplementary
219

relevant UK individual
section 178

relevant valuation factor
section 263

relievable pension contributions
section 177(2) and (3)

retail prices index
section 265(1)

scheme administrator
section 257 (but

5

see also sections 258 to

261)

scheme chargeable payment
section 230

scheme pension
paragraph 2 of

Schedule 28

10

scheme sanction charge
section 228(1)

serious ill-health lump sum
paragraph 4 of

Schedule 29

short service refund lump sum
paragraph 5 of

Schedule 29

15

sponsoring employer
section 140(6)

standard lifetime allowance
section 207(2) and (3)

sums and assets held for the purposes
section 265(3)

of an arrangement

tax year
section 265(1)

20

the tax year 2006-07 etc.
section 265(1)

total income
section 835 of ICTA

total pension input amount
section 218

transfer lump sum death benefit
paragraph 19 of

Schedule 29

25

trivial commutation lump sum
paragraph 7 of

Schedule 29

unauthorised employer payment
section 150(4)

unauthorised member payment
section 150(2)

unauthorised payment
section 150(5)

30

unauthorised payments surcharge
section 198(1)

uncrystallised funds lump sum death
paragraph 15 of

benefit
Schedule 29

unsecured pension fund lump sum
paragraph 17 of

death benefit
Schedule 29

35

Finance Bill
Part 4 — Pension schemes etc
Chapter 8 — Supplementary
220

winding-up lump sum
paragraph 10 of

Schedule 29

winding-up lump sum death benefit
paragraph 21 of

Schedule 29

Other supplementary provisions
5
267
Minor and consequential amendments
(1)
Schedule 33 contains minor and consequential amendments of enactments in
consequence of, or otherwise in connection with, this Part.
(2)
The Treasury may by order make such other amendments (including repeals
and revocations) of enactments or instruments as may appear appropriate in
10
consequence of, or otherwise in connection with, this Part.
(3)
An order under subsection (2) may include any transitional provisions or
savings appearing to the Treasury to be appropriate.
268
Orders and regulations
(1)
Any power of the Treasury or the Board of Inland Revenue to make any order
15
or regulations under this Part is exercisable by statutory instrument.
(2)
Any statutory instrument containing any order or regulations made by the
Treasury or the Board of Inland Revenue under this Part is subject to
annulment in pursuance of a resolution of the House of Commons.
269
Transitionals and savings
20
(1)
Schedule 34 contains miscellaneous transitional provisions and savings.
(2)
The Treasury may by order make any other transitional provision which may
appear appropriate in consequence of, or otherwise in connection with, this
Part or the repeals made by this Act in consequence of this Part.
(3)
An order under subsection (2) may, in particular, include savings from the
25
effect of any amendment made by this Part or any repeal made by this Act in
consequence of this Part.
(4)
Nothing in Schedule 34 limits the power conferred by subsection (2).
(5)
Nothing in that Schedule or in any provision made by virtue of subsection (2)
prejudices the operation of sections 16 and 17 of the Interpretation Act 1978
30
(c. 30) (effect of repeals).
270
Commencement
(1)
Chapters 3 to 7 and section 267 (with Schedule 33) do not come into force until
6th April 2006.
(2)
But any power to make an order or regulations under any of those provisions
35
may be exercised at any time after this Act is passed.

Finance Bill
Part 5 — Oil
221

Part 5
Oil
271
Certain receipts not to be tariff receipts
(1)
The Oil Taxation Act 1983 (c. 56) is amended as follows.
(2)
In section 6(2) (meaning of tariff receipts) after “Subject to the provisions of this
5
section” insert “and section 6A below”.
(3)
After section 6 insert—
“6A
Tax-exempt tariffing receipts
(1)
An amount which is a tax-exempt tariffing receipt (see subsection (2)
below) does not constitute a tariff receipt for the purposes of the Oil
10
Taxation Acts.
(2)
An amount is a “tax-exempt tariffing receipt” for the purposes of the Oil
Taxation Acts if—
(a)
it would, apart from this section, be a tariff receipt of a
participator in an oil field,
15
(b)
it is received or receivable by the participator in a chargeable
period ending on or after 30th June 2004 under a contract
entered into on or after 9th April 2003, and
(c)
it is in respect of tax-exempt business (see subsection (3) below).
(3)
For the purposes of this section an amount is in respect of tax-exempt
20
business if it is an amount received or receivable by a participator in an
oil field in respect of—
(a)
the use of a qualifying asset, or
(b)
the provision of services or other business facilities of whatever
kind in connection with the use, otherwise than by the
25
participator himself, of a qualifying asset,

and that use of the qualifying asset falls within subsection (4) below.
(4)
Use of a qualifying asset falls within this subsection if it is—
(a)
use in relation to a new field (see subsection (5) below) or oil
won from such a field, or
30
(b)
use in relation to a qualifying existing field (see subsection (5)
below) or oil won from such a field.
(5)
In this section—

“existing field” means any oil field or foreign field which is not a
new field;
35

“foreign field” means, subject to subsection (6) below (treatment of
transmedian fields), any hydrocarbon accumulation which is
not under the jurisdiction of the government of the United
Kingdom;

“licensee”, in relation to a foreign field, means a person who has
40
rights, interests or obligations in respect of the foreign field
under a licence or other authority granted by the government of
a country other than the United Kingdom;

“new field” means—

Finance Bill
Part 5 — Oil
222

(a)
an oil field for no part of which had—
(i)
consent for development been granted to a licensee
by the Secretary of State before 9th April 2003; or
(ii)
a programme of development been served on a
licensee or approved by the Secretary of State
5
before that date; or
(b)
a foreign field for no part of which had—
(i)
any consent for development been granted to a
licensee by the government of a country other than
the United Kingdom before 9th April 2003; or
10
(ii)
a programme of development been served on a
licensee or approved by such a government before
that date;

and subsections (4) and (5) of section 36 of the Finance Act 1983
(which define “development” for the purposes of subsections
15
(2) and (3) of that section) shall apply also for the purposes of
this definition;

“the Oil Taxation Acts” means—
(a)
Parts 1 and 3 of the principal Act;
(b)
this Act; and
20
(c)
any other enactment relating to petroleum revenue tax;

“qualifying existing field” means an existing field as respects
which the condition in section 6B(1) below is satisfied.
(6)
For the purposes of this section, in the case of an oil field which, by
virtue of section 107 of the Finance Act 1980 (transmedian fields), is
25
deemed to include the sector mentioned in subsection (1)(a)(ii) of that
section—
(a)
that sector shall be treated as a foreign field, and
(b)
the remainder of that field shall be treated as a separate oil field.
(7)
In the application of provisions of the Oil Taxation Acts relating to tax-
30
exempt tariffing receipts, references to oil, in relation to a foreign field,
are references to any substance that would be oil within the meaning of
the principal Act if the enactments mentioned in section 1(1) of that Act
extended to the foreign field.
(8)
This section is subject to the transitional provisions in Part 2 of Schedule
35
35 to the Finance Act 2004 (expenditure incurred between 9th April and
31st December 2003: treatment of initial portion of tax-exempt tariffing
receipts as tariff receipts).
6B
The condition for being a qualifying existing field
(1)
The condition for an existing field to be a qualifying existing field for
40
the purposes of section 6A above is that at no time in the period of 6
years ending with 8th April 2003 (“the 6 year period”) was there—
(a)
any use of a disqualifying asset (see subsection (2) below) in a
UK area (see subsection (11) below) in relation to the field or oil
won from it, or
45
(b)
any provision of any services or other business facilities of
whatever kind in connection with the use of a disqualifying
asset in a UK area in relation to the field or oil won from it.