Finance Bill

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Finance Bill

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
455

      (2)
For paragraph (i) substitute—
“(i)
the scheme administrator of a registered pension scheme;”.
      (3)
After paragraph (j) insert “or”.
      (4)
Omit paragraphs (l) and (m).
17
In section 360A(9)(a) (meaning of “material interest” in section 360:
5
exception from rule about trusts for certain pension scheme trusts), for “an
exempt approved scheme as defined in section 592;” substitute “a registered
pension scheme;”.
18
In section 414(7), (close companies: shares held on trust for certain pension
schemes), for “an exempt approved scheme as defined in section 592”
10
substitute “a registered pension scheme”.
19
In section 415(4)(b), (certain quoted companies not to be close companies:
shares held on trust for certain pension schemes deemed to be beneficially
held for public), for “an exempt approved scheme as defined in section 592,”
substitute “a registered pension scheme,”.
15
20
For section 431B (life assurance: meaning of “pension business”)
substitute—
“431B Meaning of “pension business”
(1)
In this Chapter “pension business” means so much of a company’s
life assurance business as is referable to contracts entered into for the
20
purposes of a registered pension scheme or is the reinsurance of such
business.
(2)
Where a pension scheme ceases to be a registered pension scheme,
any of the company’s life assurance business that was pension
business when the pension scheme was a registered pension scheme
25
is to be treated as ceasing to be pension business at the beginning of
the period of account of the company in which the pension scheme
ceases to be a registered pension scheme.”
21
In section 464(5) (policies and contracts to be disregarded in applying limits
on benefits payable to member of friendly society), for paragraph (b)
30
substitute—
“(b)
any policy of insurance or annuity contract by means of
which the benefits to be provided under an occupational
pension scheme (within the meaning of section 140(5) of the
Finance Act 2004) are secured or any annuity contract which
35
constitutes a registered pension scheme or is issued or held in
connection with a registered pension scheme other than such
an occupational pension scheme;”.
22    (1)
Section 466 (interpretation of Chapter 2 of Part 12) is amended as follows.
      (2)
In subsection (2), omit the definition of “pension business”.
40
      (3)
After that subsection insert—
“(2A)
In this Chapter “pension business” means so much of a friendly
society’s life assurance business as is referable to contracts entered
into for the purposes of a registered pension scheme.
(2B)
But where a pension scheme ceases to be a registered pension
45
scheme, any of the friendly society’s life assurance business that was

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
456

pension business when the pension scheme was a registered pension
scheme is to be treated as ceasing to be pension business at the
beginning of the period of account of the friendly society in which
the pension scheme ceases to be a registered pension scheme.”
23
In section 467(3) (exemption for trade unions and employers’ associations:
5
disregard of certain annuities for purposes of limit), for “approved annuities
(as defined in section 620(9))” substitute “annuity contract which constitutes
a registered pension scheme or is issued or held in connection with a
registered pension scheme other than an occupational pension scheme
(within the meaning of section 140(5) of the Finance Act 2004)”.
10
24
In section 503(2) (letting of furnished holiday accommodation treated as a
trade for certain purposes), for paragraph (b) and the word “and” before it
substitute—
“(b)
section 833(4)(c) (income regarded as earned income), and
(c)
section 178(2)(b) of the Finance Act 2004 (income regarded as
15
relevant UK earnings for pension purposes).”
25
In section 539(2) (policies of life insurance to which Chapter 2 of Part 13)
does not apply), for paragraphs (b) to (d) substitute—
“(b)
to any policy of insurance which constitutes, or is issued or
held in connection with, a registered pension scheme; or”.
20
26
In section 613(4) (parliamentary pension funds)—
(a)
omit “respective” and paragraphs (b) to (d), and
(b)
for “those funds” (in both places) substitute “that Fund”.
27    (1)
Section 657(2) (life annuities to which section 656 does not apply) is
amended as follows.
25
      (2)
In paragraph (b), for “266, 273 or 619 or to any annuity payable under a
substituted contract within the meaning of section 622(3);” substitute “266 or
273;”.
      (3)
For paragraphs (d) to (f) substitute—
“(d)
to any annuity under, or purchased with sums or assets held
30
for the purposes of, a registered pension scheme; or
(e)
to any annuity purchased by any person in recognition of
another’s services (or past services) in any office or
employment.”
28    (1)
Section 660A (income arising under a settlement where settlor retains an
35
interest) is amended as follows.
      (2)
In subsection (9), for paragraph (c) and the word “or” before it substitute “or
(c)
a benefit under a relevant pension scheme.”
      (3)
For subsections (11) and (12) substitute—
“(11)
In this section “relevant pension scheme” means—
40
(a)
a registered pension scheme;
(b)
a pension scheme established by a government outside the
United Kingdom for the benefit, or primarily for the benefit,
of its employees (or an annuity acquired using funds held for
the purposes of such a pension scheme); or
45
(c)
a pension scheme of any description which may be
prescribed by regulations made by the Secretary of State.”

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
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29    (1)
Section 686 (accumulation and discretionary trusts: special rates of tax) is
amended as follows.
      (2)
In subsection (2)(c), for the words following “held” substitute “for the
purposes of a superannuation fund to which section 615(3) applies”.
      (3)
In subsection (6A)—
5
(a)
for “exemptions” substitute “exemption”, and
(b)
for “as mentioned in sub-paragraph (i) or (ii) of that paragraph”
substitute “for the purposes of a superannuation fund to which
section 615(3) applies”.
30
In section 715(1)(k) (exceptions from section 713 where exemption could be
10
allowed under section 592(2)), for “section 592(2)” substitute “section 175 of
the Finance Act 2004”.
31
In section 730A(7) (treatment of price differential on sale and repurchase of
securities: power to provide eligibility for relief), for “592(2), 608(2)(a),
613(4), 614(2), (3) or (4), 620(6) or 643(2).” substitute “613(4) or 614(2), (3) or
15
(4) or section 175 of the Finance Act 2004.”
32
In section 737D(1) (manufactured dividends: power to provide eligibility for
relief), for “592(2), 608(2)(a), 613(4), 614(2), (3) or (4), 620(6) or 643(2).”
substitute “613(4) or 614(2), (3) or (4) or section 175 of the Finance Act 2004.”
33
In section 824(9) (repayment supplements), after “settlement” insert “,
20
scheme administrators of registered pension schemes”.
34    (1)
Section 832(1) (interpretation of the Tax Acts) is amended as follows.
      (2)
After the definition of “the rate applicable to trusts” insert—

““registered pension scheme” has the meaning given by section 140(2)
of the Finance Act 2004;”.
25
      (3)
After the definition of “Schedule A business” insert—

““scheme administrator”, in relation to a pension scheme, has the
meaning given by section 257 of the Finance Act 2004 (but see also
sections 258 to 261 of that Act);”.
35
In section 828 (orders and regulations), after subsection (5) insert—
30
“(6)
Nothing in this section applies in relation to any of the following (in
relation to which section 268 of the Finance Act 2004 applies)—
(a)
any power of the Treasury or the Board to make any order or
regulations under Part 4 of that Act;
(b)
any statutory instrument containing any order or regulations
35
made by the Treasury or the Board under that Part of that
Act.”
36
In section 840A(1)(b)(iv) (definition of “bank”: exclusion of insurance
companies), for “659B(1);” substitute “262 of the Finance Act 2004;”.
Finance Act 1990 (c. 29)
40
37
In section 25(9) of the Finance Act 1990 (donations to charity by individual:
tax to be disregarded in determining total amount of income tax and capital
gains tax with which donor is charged for a year of assessment), after

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
458

paragraph (b) insert—
“(ba)
any tax paid to meet the lifetime allowance charge or the
annual allowance charge (under Part 4 of the Finance Act
2004);”,

and, in paragraph (c), for “that Act” substitute “the Taxes Act 1988”.
5
Taxation of Chargeable Gains Act 1992 (c. 12)
38
The Taxation of Chargeable Gains Act 1992 is amended as follows.
39
In section 13(10B)(b) (attribution of gains to members of non-resident
companies), for “section 271(1)(b), (c), (d), (g) or (h) or (2)” substitute “section
271(1)(c) or (1A)”.
10
40
For sections 239A and 239B (cessation of approval of retirement benefits
schemes and withdrawal of approval of personal pension arrangements)
substitute—
“Registered pension schemes
239A De-registration of registered pension schemes
15
(1)
This section applies where tax is charged in accordance with section
231 of the Finance Act 2004 (de-registration charge) where the
registration of a registered pension scheme is withdrawn.
(2)
For the purposes of this Act the assets which at the relevant time are
held for the purposes of the pension scheme—
20
(a)
are treated as having been acquired at the relevant time for a
consideration equal to the amount on which tax is charged by
virtue of section 231 of the Finance Act 2004 by the person
who would be chargeable in respect of a chargeable gain
accruing on a disposal of the assets at the relevant time, and
25
(b)
are not to be treated as having been disposed of by any
person at the relevant time.
(3)
In subsection (2) “the relevant time” means the time immediately
before the date of withdrawal of registration of the pension scheme.”
41
In section 288(1) (interpretation), after the definition of “recognised stock
30
exchange” insert—

““registered pension scheme” has the meaning given by section 140(2)
of the Finance Act 2004;”.
42    (1)
Paragraph 2 of Schedule 1 (application of exempt amount and reporting
limits in cases involving settled property) is amended as follows.
35
      (2)
In sub-paragraph (7)(b)(ii), for “any such scheme or fund as is mentioned in
sub-paragraph (8) below” substitute “a registered pension scheme, a
superannuation fund to which section 615(3) of the Taxes Act applies or an
occupational pension scheme (within the meaning of section 140(5) of the
Finance Act 2004) that is not a registered pension scheme”.
40
      (3)
Omit sub-paragraph (8).

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
459

Finance Act 1996 (c. 8)
43
The Finance Act 1996 is amended as follows.
44
In section 148 (mis-sold personal pensions), after subsection (6) insert—
“(6A)
References in subsections (3)(d) and (6) to provisions of Part 14 of the
Taxes Act 1988 are to those provisions as they had effect at the time
5
in question.”
45
In paragraph 2(1D) of Schedule 9 (loan relationships: late interest), for
“retirement benefits scheme (as defined in section 611 of the Taxes Act
1988)” substitute “an occupational pension scheme (within the meaning of
section 140(5) of the Finance Act 2004)”.
10
Finance Act 1999 (c. 16)
46    (1)
Paragraph 6A of Schedule 19 to the Finance Act 1999 (stamp duty reserve tax
on dealings with units in unit trusts) is amended as follows.
      (2)
In sub-paragraph (4), for the definition of “individual pension account”
substitute—
15

““individual pension account” has the meaning given by
regulations made by the Commissioners of Inland Revenue;”.
      (3)
After that sub-paragraph insert—
“(5)
Regulations under sub-paragraph (4) shall be made by statutory
instrument which shall be subject to annulment in pursuance of a
20
resolution of the House of Commons.”
Capital Allowances Act 2001 (c. 2)
47
The Capital Allowances Act 2001 is amended as follows.
48
In section 4(2A) (expenditure and sums that are not capital expenditure or
capital sums), in the definition of “relevant provision”, for paragraph (d)
25
substitute—
“(d)
sections 177 to 183 of FA 2004 (contributions under
registered pension schemes), and”.
49
In Part 1 of Schedule 1 (abbreviations) insert at the end—

“FA 2004
The Finance Act 2004

30

(c. )”.

Finance Act 2002 (c. 23)
50
The Finance Act 2002 is amended as follows.
51
In paragraph 4(2)(c) of Schedule 22 (computation of profits: adjustment on
change of basis)—
35
(a)
for “relevant earnings within section 623(2)(c) or 644(2)(c) of the
Taxes Act 1988” substitute “relevant UK earnings within Part 4 of the
Finance Act 2004”, and

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
460

(b)
for “similarly relevant earnings” substitute “similarly relevant UK
earnings”.
52    (1)
Schedule 29 (gains and losses of a company from intangible fixed assets) is
amended as follows.
      (2)
In paragraph 112(2), for paragraph (d) substitute—
5
“(d)
section 233(2) of the Finance Act 2004 (expenditure on
benefits under employer-financed retirement benefits
schemes).”
53
In paragraph 114, for sub-paragraph (3) substitute—
“(3)
For the purposes of this paragraph “pension
10
contributions” means—
(a)
sums paid by an employer by way of
contributions under a registered pension
scheme,
(b)
sums paid to the trustees or managers of a
15
registered pension scheme that are treated as
if they were the payment of contributions
under the pension scheme (see section 188 of
the Finance Act 2004), or
(c)
expenses within section 233(3) of the Finance
20
Act 2004 (expenditure on benefits under
employer-financed retirement benefits
schemes).”
Income Tax (Earnings and Pensions) Act 2003 (c. 1)
54
The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.
25
55
In section 23(3) (calculation of “chargeable overseas earnings”), in Step 2, for
paragraphs (b) and (c) substitute—
“(b)
sections 177 to 183 of FA 2004 (contributions to registered
pension schemes), or”.
56
In section 54(1) (calculation of deemed employment payment), in Step 5, for
30
“scheme approved under Chapter 1 or 4 of Part 14 of ICTA” substitute
“registered pension scheme”.
57
In section 56(8) (application of Income Tax Acts in relation to deemed
employment), for “relevant earnings of the worker for the purposes of
section 644 of ICTA (relevant earnings for purposes of permissible pension
35
contributions).” substitute “relevant UK earnings of the worker for the
purposes of Part 4 of FA 2004.”
58
In section 218(4) (“lower-paid employment”: deductions to be subtracted),
for the references to sections 592(7) and 594 of ICTA substitute—

“sections 177 to 183 of FA 2004 (contributions to registered pension
40
schemes), or”.
59
In section 315(5) (limited exemption for expenses connected with certain
living accommodation), in Step 3, for paragraph (b) substitute—
“(b)
sections 177 to 183 of FA 2004 (contributions to registered
pension schemes), or”.
45
60    (1)
Section 327 (deductions from earnings: general) is amended as follows.

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
461

      (2)
In subsection (4), omit the entry relating to section 619 of ICTA.
      (3)
In subsection (5), for the entries relating to sections 592(7) and 594(1) of ICTA
substitute “and

sections 177 to 183 of FA 2004 (contributions to registered pension
schemes).”
5
61
In section 381 (deductions from seafarers’ earnings: taking account of other
deductions), for paragraphs (c) to (e) substitute—
“(c)
section 262 of CAA 2001 (capital allowances to be given effect
by treating them as deductions from earnings), and
(d)
sections 177 to 183 of FA 2004 (contributions to registered
10
pension schemes).”
62    (1)
Section 407 (payments and benefits on termination of employment:
exception for payments and benefits under tax-exempt pension schemes) is
amended as follows.
      (2)
In subsection (2), for paragraph (a) substitute—
15
“(a)
a registered pension scheme,
(aa)
a scheme set up by a government outside the United
Kingdom for the benefit of employees or primarily for their
benefit, or”.
      (3)
Omit subsection (3).
20
63    (1)
Section 408 (payments and benefits on termination of employment:
exception for contributions to tax-exempt pension schemes) is amended as
follows.
      (2)
In subsection (1), for “tax-exempt pension scheme or approved personal
pension arrangements” substitute “registered pension scheme”.
25
      (3)
Omit subsection (2).
      (4)
In the heading, for “tax-exempt pension schemes” substitute “registered
pension schemes”.
64
In section 563 (former employees: deductions for liabilities), in the definition
of “relevant retirement benefit”, for paragraphs (a) and (b) substitute—
30
“(a)
which is received by the former employee under an
employer-financed retirement benefits scheme,
and
(b)
which, under Chapter 2 of Part 6, counts as
employment income of the former employee.”
35
65    (1)
Schedule 1 (abbreviations and defined expressions) is amended as follows.
      (2)
In Part 1, insert at the end—

“FA 2004
The Finance Act 2004

(c. )”.

      (3)
In Part 2, insert at the appropriate place—
40