Finance Bill

House of Commons

Session 2002 - 03
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Finance Bill

Finance Bill
Part 4 — Pension schemes etc
Chapter 6 — Employer-financed retirement benefits schemes
206

(4)
In subsection (3)(c) “relevant life policy” means—
(a)
a group life policy as defined in section 539(3) of ICTA (life
policies excluded from charges on gains) with respect to which
the conditions in section 539A of that Act are met,
(b)
a policy of life insurance the terms of which provide for the
5
payment of benefits on the death of a single individual and with
respect to which condition 1 in that section would be met if it
referred to that individual (rather than each of the individuals
insured under the policy) and conditions 3, 4, 5 and 7 in that
section are met, or
10
(c)
a policy of life insurance that would be within paragraph (a) or
(b) but for the fact that it provides for a benefit which is an
excluded benefit under or by virtue of paragraph (a), (b) or (d)
of subsection (3).
(5)
In subsection (1)(e) “pension sharing order or provision” means any
15
such order or provision as is mentioned in section 28(1) of WRPA 1999
or Article 25(1) of WRP(NI)O 1999.”
(4)
Section 394 (charge on benefit) is amended as follows.
(5)
After subsection (1) insert—
“(1A)
Subsection (1) does not apply in relation to the benefit if the total
20
amount of the benefits to which this Chapter applies received by the
individual in the relevant tax year does not exceed £100.”
(6)
In subsection (2), for “administrator of” substitute “person who is (or persons
who are) the responsible person in relation to”.
(7)
In subsection (3), for “subsections (1) and (2)” substitute “this section”.
25
(8)
For sections 395 to 397 substitute—
“395
Reduction where employee has contributed
(1)
This section applies in relation to a relevant benefit under an employer-
financed retirement benefits scheme in the form of a lump sum where,
under the scheme, an employee has paid any sum or sums by way of
30
contribution to the provision of the lump sum.
(2)
The amount which, by virtue of section 394, counts as employment
income, or is chargeable to tax under Case VI of Schedule D, is the
amount of the lump sum reduced by the sum, or the aggregate of the
sums, paid by the employee by way of contribution to the provision of
35
the lump sum.
(3)
A reduction under this section may not be claimed in respect of the
same contribution in relation to more than one lump sum.
(4)
It is to be assumed, unless the contrary is shown, that no reduction is
applicable under this section.”
40
(9)
In subsection (1) of section 399 (valuation of benefit in form of loan), for
“administrator of” substitute “person who is (or any of the persons who are)
the responsible person in relation to”.
(10)
In subsection (2) of that section, for “administrator” substitute “responsible
person”.
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Finance Bill
Part 4 — Pension schemes etc
Chapter 6 — Employer-financed retirement benefits schemes
207

(11)
For section 400 substitute—
“399A
Responsible person
(1)
The following heads specify the person who is, or persons who are, the
responsible person in relation to an employer-financed retirement
benefits scheme for the purposes of this Chapter.
5
(2)
But if a person is, or persons are, the responsible person in relation to
the scheme by virtue of being specified under one head, no-one is the
responsible person in relation to the scheme by virtue of being specified
under a later head.

10
Head 1
If there are one or more trustees of the scheme who are resident in the
United Kingdom, that trustee or each of those trustees.
Head 2
If there are one or more persons who control the management of the
15
scheme, that person or each of those persons.
Head 3
If alive or still in existence, the employer, or any of the employers, who
established the scheme and any person by whom that employer, or any
of those employers, has been directly or indirectly succeeded in relation
20
to the provision of benefits under the scheme.
Head 4
Any employer of employees to or in respect of whom benefits are, or
are to be, provided under the scheme.
Head 5
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If there are one or more trustees of the scheme who are not resident in
the United Kingdom, that trustee or each of those trustees.
400
Interpretation
In this Chapter—
“employer-financed retirement benefits scheme” has the meaning
30
given by section 393A;
“relevant benefits” has the meaning given by section 393B; and
“responsible person” has the meaning given by section 399A.”
(12)
In Part 2 of Schedule 1 to ITEPA 2003 (defined expressions), insert at the
appropriate places—
35

“employer-financed retirement benefits
section 393A”

scheme (in Chapter 2 of Part 6)

“relevant benefits (in Chapter 2 of Part
section 393B”

6)

“responsible person (in Chapter 2 of
section 399A”.

40

Part 6)

Finance Bill
Part 4 — Pension schemes etc
Chapter 7 — Compliance
208

Chapter 7
Compliance
Information
244
Registered pension scheme return
(1)
The Inland Revenue may, in relation to any tax year, by notice require the
5
scheme administrator of a registered pension scheme—
(a)
to make and deliver to the Inland Revenue a return containing any
information reasonably required by the notice, and
(b)
to deliver with the return any accounts, statements or other documents
relating to information contained in the return which may reasonably
10
be required by the notice.
(2)
The information that may be required to be included in the return is any
information relating to—
(a)
contributions made under the pension scheme,
(b)
transfers of sums or assets held for the purposes of, or representing
15
accrued rights under, another pension scheme so as to become held for
the purposes of, or to represent rights under, the pension scheme,
(c)
income and gains derived from investments or deposits held for the
purposes of the pension scheme,
(d)
other receipts of the pension scheme,
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(e)
the sums and other assets held for the purposes of the pension scheme,
(f)
the liabilities of the pension scheme,
(g)
the provision of benefits by the pension scheme,
(h)
transfers of sums or assets held for the purposes of, or representing
accrued rights under, the pension scheme so as to become held for the
25
purposes of, or to represent rights under, another pension scheme,
(i)
other expenditure of the pension scheme,
(j)
the membership of the pension scheme, or
(k)
any other matter relating to the administration of the pension scheme.
(3)
The information that may be required to be included in the return may be
30
limited to information concerning any particular arrangement or
arrangements under the pension scheme.
(4)
The notice must specify the period to be covered by the return.
(5)
The period may be—
(a)
the whole or any specified part of the tax year, or
35
(b)
if audited accounts of the pension scheme have been prepared for any
period or periods ending in the tax year, the period or periods covered
by the accounts.
(6)
“Audited accounts” means accounts audited by a person of a description
specified in regulations made by the Board of Inland Revenue.
40
(7)
A return relating to the whole or part of, or to a period or periods ending in, a
tax year must be delivered—

Finance Bill
Part 4 — Pension schemes etc
Chapter 7 — Compliance
209

(a)
where the notice requiring the return is given after the 31st October in
the next tax year, before the end of the period of three months
beginning with the day on which the notice is given, and
(b)
otherwise, not later than the 31st January in the next tax year (but
subject as follows).
5
(8)
If, in a case within paragraph (b) of subsection (7), the winding-up of the
pension scheme has been completed before 31st October in the next tax year,
the return must be delivered before the end of the period of three months
beginning with the day on which the winding-up is completed.
(9)
But subsection (8) does not apply if the end of that period is before the end of
10
the period of three months beginning with the day on which the notice is given;
and in that case the return must be delivered before the end of that period.
245
Information: general requirements
(1)
The Board of Inland Revenue may by regulations make provision requiring
persons of a prescribed description—
15
(a)
to provide to the Inland Revenue, in a form specified by the Board of
Inland Revenue, information of a prescribed description relating to any
of the matters mentioned in subsection (2), and
(b)
to preserve for a prescribed period any documents relating to such
information.
20
(2)
Those matters are—
(a)
any matter relating to a registered pension scheme,
(b)
any matter relating to a pension scheme which has ceased to be a
registered pension scheme,
(c)
any matter relating to a pension scheme in relation to which an
25
application for registration has been made,
(d)
any matter relating to an annuity purchased with sums or assets held
for the purposes of a registered pension scheme,
(e)
the coming into operation of an employer-financed retirement benefits
scheme, and
30
(f)
the provision of relevant benefits under an employer-financed
retirement benefits scheme.
(3)
In subsection (2)—

“employer-financed retirement benefits scheme”, and

“relevant benefits”,
35

have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections
393A and 393B of that Act).
(4)
The Board of Inland Revenue may by regulations make provision—
(a)
requiring scheme administrators of registered pension schemes or
other persons of a prescribed description to provide information of a
40
prescribed description to persons of such of the descriptions mentioned
in subsection (5) as are prescribed, or
(b)
requiring persons of such of the descriptions specified in subsection (5)
as are prescribed to provide information of a prescribed description to
the scheme administrators of registered pension schemes.
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(5)
Those persons are—

Finance Bill
Part 4 — Pension schemes etc
Chapter 7 — Compliance
210

(a)
members of a registered pension scheme,
(b)
persons who have ceased to be members of a registered pension
scheme,
(c)
persons to whom benefits under a registered pension scheme are being,
or have been, provided,
5
(d)
the personal representatives of any person within paragraphs (a) to (c),
and
(e)
insurance companies who pay annuities purchased with sums or assets
held for the purposes of registered pension schemes.
(6)
“Prescribed”, in relation to regulations, means prescribed by the regulations.
10
246
Notices requiring documents or particulars
(1)
The Inland Revenue may by notice require any person of a description
prescribed by regulations made by the Board of Inland Revenue—
(a)
to produce to the Inland Revenue, or to make available for inspection
by the Inland Revenue, any documents within the person’s possession
15
or power relating to any of the matters mentioned in subsection (3)
which the Inland Revenue may reasonably require, and
(b)
to provide to the Inland Revenue any particulars relating to any of
those matters which the Inland Revenue may reasonably require.
(2)
The Inland Revenue may by notice require any other person to produce to the
20
Inland Revenue, or to make available for inspection by the Inland Revenue,
any documents within the person’s possession or power which—
(a)
relate to any of the matters mentioned in subsection (3), and
(b)
were created not more than six years before the day on which the notice
is given,
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and which the Inland Revenue may reasonably require.
(3)
The matters referred to in subsections (1) and (2) are—
(a)
any matter relating to a registered pension scheme,
(b)
any matter relating to a pension scheme which has ceased to be a
registered pension scheme,
30
(c)
any matter relating to a pension scheme in relation to which an
application for registration has been made,
(d)
any matter relating to an annuity purchased with sums or assets held
for the purposes of a registered pension scheme,
(e)
the coming into operation of an employer-financed retirement benefits
35
scheme, and
(f)
the provision of relevant benefits under an employer-financed
retirement benefits scheme.
(4)
In subsection (3)—

“employer-financed retirement benefits scheme”, and
40

“relevant benefits”,

have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections
393A and 393B of that Act).
(5)
A notice under this section must specify the period within which it is to be
complied with; and that period may not end earlier than the period of 30 days
45
beginning with the day on which the notice is given.

Finance Bill
Part 4 — Pension schemes etc
Chapter 7 — Compliance
211

(6)
A notice under subsection (2) must specify the pension scheme or employer-
financed retirement benefits scheme to which it relates.
(7)
The Inland Revenue must notify the scheme administrator of the pension
scheme, or the responsible person in relation to the employer-financed
retirement benefits scheme, to which such a notice relates that the notice has
5
been given no later than the end of the period of 30 days beginning with the
day on which it is given.
(8)
In subsection (7) “responsible person” has the same meaning as in Chapter 2 of
Part 6 of ITEPA 2003 (see section 399A of that Act).
(9)
A person may comply with a notice under this section requiring the production
10
of a document by producing a copy of the document.
(10)
But where a person produces a copy of a document in compliance with a notice
under this section the Inland Revenue may by notice require the production of
the original for inspection within a period specified in the notice; and that
period may not end earlier than the period of 30 days beginning with the day
15
on which the notice is given.
(11)
The Inland Revenue may take copies of, or make extracts from, any document
produced in compliance with a notice under this section.
(12)
A notice under this section does not require a person—
(a)
to produce or make available for inspection any document, or
20
(b)
to provide any particulars,

relating to any pending appeal by the person relating to tax.
247
Appeal against notices
(1)
The person to whom a notice under section 246(1) or (2) (notices requiring
documents or particulars) is given may appeal against any requirement
25
imposed by the notice.
(2)
The appeal must be brought within the period of 30 days beginning with the
date on which the notice is given.
(3)
The appeal is to the General Commissioners, except that the appellant may
elect (in accordance with section 46(1) of TMA 1970) to bring the appeal before
30
the Special Commissioners instead of the General Commissioners.
(4)
Paragraphs 1, 2, 8 and 9 of Schedule 3 to TMA 1970 (rules for assigning
proceedings to General Commissioners) have effect to identify the General
Commissioners before whom an appeal under this section is to be brought, but
subject to modifications specified in an order made by the Board of Inland
35
Revenue.
(5)
An appeal under this section against a requirement imposed by a notice must
be brought within the period of 30 days beginning with the day on which the
notice was given.
(6)
The Commissioners before whom an appeal under this section is brought must
40
consider whether the production of the document, or provision of the
particulars, to which the appeal relates was reasonably required by the Inland
Revenue.

Finance Bill
Part 4 — Pension schemes etc
Chapter 7 — Compliance
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(7)
If they decide that it was, they must confirm the notice so far as relating to that
requirement.
(8)
If they decide that it was not, they must set aside the notice so far as relating to
that requirement.
(9)
If the notice is confirmed it has effect in relation to the requirement to which
5
the appeal relates as if it specified as the period within which it must be
complied with the period of 30 days beginning with the day on which the
appeal was determined.
(10)
The determination of the Commissioners is final and conclusive.
Accounting and assessment
10
248
Accounting for tax by scheme administrators
(1)
A scheme administrator of a registered pension scheme must make returns to
the Inland Revenue of the income tax to which the scheme administrator is
liable under this Part.
(2)
A return is to be made for each period of three months ending with 31st March,
15
30th June, 30th September or 31st December if tax has been charged on the
scheme administrator by virtue of this Part in that period.
(3)
A return for any period must be made before the end of the period of 45 days
beginning with the day immediately following the end of that period.
(4)
A return must—
20
(a)
show the income tax to which the scheme administrator is liable, and
(b)
include such particulars of the events or other circumstances giving rise
to the liability (including particulars as to the persons to whom the
events or other circumstances relate) as are required to be included in
returns under this section by regulations made by the Board of Inland
25
Revenue.
(5)
The income tax required to be shown in a return is due at the time by which the
return is to be made and is payable without the making of an assessment.
(6)
The Board of Inland Revenue may by regulations make provision for and in
connection with—
30
(a)
the charging of interest on tax due under this section which is not paid
on or before the due date,
(b)
the making of amended returns by scheme administrators in the event
of error in a return under this section,
(c)
the making of assessments, repayments or adjustments in cases where
35
the correct tax due under this section has not been paid on or before the
due date, and
(d)
otherwise for supplementing this section.
(7)
The regulations may, in particular—
(a)
modify the operation of any provision of the Tax Acts, or
40
(b)
provide for the application of any provision of the Tax Acts (with or
without modifications).