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

225

 

(c)   

that the pension scheme was an occupational pension scheme and at

any time during the relevant three-year period the person was a

controlling director of a company that was a sponsoring employer, and

(d)   

that at any time during the relevant three-year period the pension

scheme received a transfer value in which there were represented

5

relevant controlling director contributions made by or in respect of the

person.

(6)   

A notification under subsection (2)(b) may be included in an assessment in

respect of a liability under this section; and such an assessment made in

relation to an amount is not out of time if made within the period of three years

10

beginning with the date on which the person assessed first became liable to pay

the amount.

(7)   

“Relevant personal pension contributions” means contributions under a

pension scheme (whether or not the pension scheme from which the transfer

value was received) which was established by a person or body specified in

15

section 151(1)(a) to (g) and was not an occupational pension scheme.

(8)   

“Relevant controlling director contributions” means contributions under an

occupational pension scheme (whether or not the pension scheme from which

the transfer value was received) made by reference to service (or remuneration

in respect of service) as a controlling director of a company that was a

20

sponsoring employer.

(9)   

A person is a “controlling director” of a company if the person is a director of

the company and is within section 417(5)(b) of ICTA (director able to control

20% of ordinary share capital) in relation to the company.

(10)   

References to receipt of a transfer value by the pension scheme are to the

25

transfer, so as to become held for the purposes of or to represent rights under

the pension scheme, of any sums or assets held for the purposes of or

representing accrued rights under any other pension scheme.

(11)   

Section 839 of ICTA (connected persons) applies for the purposes of this

section.

30

268     

Supplementary

(1)   

The fact that any person is liable to pay any tax or interest, or is responsible for

the discharge of any other obligation, under section 266 (trustees etc.) or

section 267 (members) does not relieve any other person of any liability to pay

the tax or interest, or any obligation to discharge the obligation, arising—

35

(a)   

by reason of that other person being, or being one of the persons who

is, the scheme administrator of the pension scheme, or

(b)   

under section 265(4) (continuation of liability where no scheme

administrator).

(2)   

Where a liability imposed on the scheme administrator of a registered pension

40

scheme falls to be satisfied by two or more persons (whether or not they

constitute the scheme administrator), they are jointly and severally liable.

(3)   

No liability to pay tax or interest, or other obligation, of any person in relation

to a registered pension scheme arising—

(a)   

by reason of the person being, or being one of the persons who is, the

45

scheme administrator of the pension scheme concerned, or

(b)   

under section 265(4), 266 or 267,

 

 

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

226

 

   

is affected by the termination of the pension scheme or by its ceasing to be a

registered pension scheme.

Chapter 8

Supplementary

Interpretation

5

269     

Insurance company

(1)   

In this Part “insurance company” means—

(a)   

a person who has permission under Part 4 of FISMA 2000 to effect or

carry out contracts of long-term insurance, or

(b)   

an EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to

10

FISMA 2000 (certain direct insurance undertakings) which has

permission under paragraph 15 of that Schedule (as a result of

qualifying for authorisation under paragraph 12 of that Schedule) to

effect or carry out contracts of long-term insurance.

(2)   

“Contracts of long-term insurance” means contracts which fall within Part 2 of

15

Schedule 1 to the Financial Services and Markets Act 2000 (Regulated

Activities) Order 2001 (S.I. 2001/544).

270     

Relevant valuation factor

(1)   

For the purposes of this Part the relevant valuation factor in relation to any

registered pension scheme, or any arrangement under a registered pension

20

scheme, is 20.

(2)   

But the Inland Revenue and the scheme administrator of any registered

pension scheme may agree that the relevant valuation factor in relation to the

pension scheme, or any arrangement under the pension scheme, is to be a

number greater than 20.

25

271     

Valuation assumptions

For the purposes of this Part the valuation assumptions in relation to a person

and any benefits are—

(a)   

if the person has not reached such age (if any) as must have been

reached to avoid any reduction in the benefits on account of age, that

30

the person reached that age on the date, and

(b)   

that the person’s right to receive the benefits had not been occasioned

by physical or mental impairment.

272     

Market value

(1)   

For the purposes of this Part the market value of an asset held for the purposes

35

of a pension scheme is to be determined in accordance with section 272 of

TCGA 1992.

(2)   

Where an asset held for the purposes of a pension scheme is a right or interest

in respect of any money lent (directly or indirectly) to any relevant associated

 

 

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

227

 

person, the value of the asset is to be treated as being the amount owing

(including any unpaid interest) on the money lent.

(3)   

The following are “relevant associated persons”—

(a)   

any employer who has at any time (whether or not before the making

of the loan) made contributions under the pension scheme,

5

(b)   

any company connected (at the time of the making of the loan or

subsequently) with any such employer,

(c)   

any person who has at any time (whether or not before the making of

the loan) been a member of the pension scheme, and

(d)   

any person connected (at the time of the making of the loan or

10

subsequently) with any such person.

(4)   

Section 839 of ICTA (connected persons) applies for the purposes of this

section.

273     

Other definitions

(1)   

In this Part—

15

   

“the Board of Inland Revenue” means the Commissioners of Inland

Revenue,

   

“charity” has the same meaning as in section 506 of ICTA,

   

“employee” and “employer” have the same meaning as in the

employment income Parts of ITEPA 2003 (see sections 4 and 5 of that

20

Act) but include (respectively) a former employee and a former

employer (and “employment” is to be read accordingly),

   

“the Inland Revenue” means any officer of the Board of Inland Revenue,

   

“normal minimum pension age” means—

(a)   

before 6th April 2010, 50, and

25

(b)   

on and after that date, 55,

   

“pension credit” and “pension debit” have the same meaning as in

Chapter 1 of Part 4 of WRPA (see section 46(1) of that Act) or Chapter 1

of Part 5 of WRP(NI)O 1999 (see Article 43(1) of that Order),

   

“pension sharing order or provision” means any order or provision

30

mentioned in section 28(1) of WRPA 1999 or Article 25(1) of WRP(NI)O

1999,

   

“personal representatives”, in relation to a person who has died, means—

(a)   

in the United Kingdom, persons responsible for administering

the estate of the deceased, and

35

(b)   

in a country or territory outside the United Kingdom, the

persons having functions under its law equivalent to those of

administering the estate of the deceased,

   

“retail prices index” means the general index (for all items) published by

the Office for National Statistics or, if that index is not published for a

40

relevant month, any substituted index or index figures published by

that Office,

   

“tax year” means, in relation to income tax, a year for which any Act

provides for income tax to be charged, and

   

“the tax year 2006-07” means the tax year beginning on 6th April 2006

45

(and any corresponding expression in which two years are

simultaneously mentioned is to be read in the same way).

 

 

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

228

 

(2)   

In this Part references to payments made, or benefits provided, by a pension

scheme are to payments made or benefits provided from sums or assets held

for the purposes of the pension scheme.

(3)   

For the purposes of this Part the sums and assets held for the purposes of an

arrangement under a pension scheme are so much of the sums and assets held

5

for the purposes of the pension scheme under which the arrangement is made

as are properly attributable, in accordance with the provisions of the pension

scheme and any just and reasonable apportionment, to the arrangement.

274     

Abbreviations and general index

(1)   

In this Part—

10

   

“NIA 1965” means the National Insurance Act 1965 (c. 51) ,

   

“NIA(NI) 1966” means the National Insurance Act (Northern Ireland)

1966 (c. 6 (N.I.)),

   

“TMA 1970” means the Taxes Management Act 1970 (c. 9),

   

“ICTA 1970” means the Income and Corporation Taxes Act 1970 (c. 10),

15

   

“ICTA” means the Income and Corporation Taxes Act 1988 (c. 1),

   

“SSCBA 1992” means the Social Security Contributions and Benefits Act

1992 (c. 4),

   

“SSCB(NI)A 1992” means the Social Security Contributions and Benefits

(Northern Ireland) Act 1992 (c. 7),

20

   

“TCGA 1992” means the Taxation of Chargeable Gains Act 1992 (c. 12),

   

“WRPA 1999” means the Welfare Reform and Pensions Act 1999 (c. 30),

   

“WRP(NI)O 1999” means the Welfare Reform and Pensions (Northern

Ireland) Order 1999 (S.I. 1999/ 3147 (N.I. 11)),

   

“FISMA 2000” means the Financial Services and Markets Act 2000 (c. 8),

25

and

   

“ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003

(c. 1).

(2)   

In this Part the following expressions are defined or otherwise explained by the

provisions indicated—

30

 

accounting period

section 834(1) of ICTA

 
 

active member (of a pension scheme)

section 148(2)

 
 

active membership period (in sections

section 217(4) and (5)

 
 

217 to 219)

  
 

amount crystallised

section 212

 

35

 

annual allowance

section 224

 
 

annual allowance charge

section 223(1)

 
 

annuity protection lump sum death

paragraph 16 of

 
 

benefit

Schedule 29

 
 

arrangement

section 149(1)

 

40

 

authorised surplus payment

section 173

 
 

 

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

229

 
 

available (in relation to a person’s

section 215

 
 

lifetime allowance)

  
 

basic rate

section 832(1) of ICTA

 
 

basic rate limit

section 832(1) of ICTA

 
 

benefits (provided by pension scheme)

section 273(2)

 

5

 

benefit crystallisation event

section 212

 
 

the Board of Inland Revenue

section 273(1)

 
 

borrowing (in Chapter 3)

section 160

 
 

cash balance arrangement

section 149(3)

 
 

cash balance benefits

section 149(5)

 

10

 

chargeable gain

section 832(1) of ICTA

 
 

charity

section 273(1)

 
 

company

section 832(1) of ICTA

 
 

compensation payment

section 174

 
 

contribution

sections 184(4) to 

 

15

  

(6) and 191

 
 

defined benefits

section 149(7)

 
 

defined benefits arrangement

section 149(6)

 
 

defined benefits lump sum death

paragraph 13 of

 
 

benefit

Schedule 29

 

20

 

dependant’s alternatively

paragraph 25 of

 
 

secured pension fund

Schedule 28

 
 

dependants’ scheme pension

paragraph 16 of 

 
  

Schedule 28

 
 

dependant’s unsecured pension fund

paragraph 22 of

 

25

  

Schedule 28

 
 

employee and employer (and

section 273(1)

 
 

employment)

  
 

employment income

section 7(2) of ITEPA 

 
  

2003

 

30

 

enhanced lifetime allowance

section 250(2)

 
 

regulations

  
 

entitled (in relation to a lump sum)

section 163(2)

 
 

entitled (in relation to a pension)

section 162(3)

 
 

higher rate

section 832(1) of ICTA

 

35

 

 

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

230

 
 

hybrid arrangement

section 149(8)

 
 

ill-health condition

paragraph 1 of

 
  

Schedule 28

 
 

the individual (in sections 211 to 215)

section 210(5)

 
 

the Inland Revenue

section 273(1)

 

5

 

insurance company

section 269

 
 

investments (in relation to a pension

section 182(3) and (4)

 
 

scheme)

  
 

liability (in Chapter 3)

section 160

 
 

lifetime allowance (in relation to a

section 214

 

10

 

person)

  
 

lifetime allowance charge

section 210(1)

 
 

lifetime allowance enhancement factors

section 214(5)

 
 

lifetime allowance excess lump sum

paragraph 11 of

 
  

Schedule 29

 

15

 

lifetime annuity

paragraph 3 of

 
  

Schedule 28

 
 

loan (in Chapter 3)

section 159

 
 

lump sum death benefit

section 165(2)

 
 

market value

section 272

 

20

 

member (of a pension scheme)

section 148(1)

 
 

member’s alternatively

paragraph 11 of

 
 

secured pension fund

Schedule 28

 
 

member’s unsecured pension fund

paragraph 8 of

 
  

Schedule 28

 

25

 

money purchase arrangement

section 149(2)

 
 

money purchase benefits

section 149(4)

 
 

net pay pension scheme

section 187(9)

 
 

normal minimum pension age

section 273(1)

 
 

occupational pension scheme

section 147(5)

 

30

 

overseas arrangement active

section 220(7) and (8)

 
 

membership period (in sections 220 to

  
 

222)

  
 

payment (in Chapter 3)

section 158

 
 

payments (made by pension scheme)

section 273(2)

 

35

 

 

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

231

 
 

pension

section 162(2)

 
 

pension commencement lump sum

paragraph 1 of

 
  

Schedule 29

 
 

pension credit and pension debit

section 273(1)

 
 

pension input amount

section 225

 

5

 

pension input period

section 234

 
 

pension protection lump sum death

paragraph 14 of

 
 

benefit

Schedule 29

 
 

pension scheme

section 147(1)

 
 

the pension scheme (in sections 211 to 

section 210(5)

 

10

 

215)

  
 

pension sharing order or provision

section 273(1)

 
 

pensioner member (of a pension

section 148(3)

 
 

scheme)

  
 

period of account

section 832(1) of ICTA

 

15

 

personal representatives

section 273(1)

 
 

property investment LLP

section 842B of ICTA

 
 

public service pension scheme

section 147(3)

 
 

recognised overseas pension scheme

section 147(7)

 
 

recognised overseas scheme

section 220(2) and (3)

 

20

 

arrangement (in sections 220 to 222

  
 

registered pension scheme

section 147(2)

 
 

relevant overseas individual

section 217(3)

 
 

relevant UK earnings

section 185(2)

 
 

relevant UK individual

section 185

 

25

 

relevant valuation factor

section 270

 
 

relievable pension contributions

section 184(2) and (3)

 
 

retail prices index

section 273(1)

 
 

scheme administrator

section 264 (but

 
  

see also sections 265 to

 

30

  

268)

 
 

scheme chargeable payment

section 237

 
 

scheme pension

paragraph 2 of

 
  

Schedule 28

 
 

scheme sanction charge

section 235(1)

 

35

 

 

 
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