Finance Bill

House of Commons

Session 2002 - 03
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Finance Bill

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
476

(b)
that, on a claim made by the employee, the Board are satisfied
that the pension scheme corresponds to a registered pension
scheme.
(8)
In subsection (6)(a) “earnings charged on remittance” means
earnings which are taxable earnings under—
5
(a)
section 22 of ITEPA 2003 (chargeable overseas earnings for
year when employee resident and ordinarily resident, but not
domiciled, in UK), or
(b)
section 26 of that Act (foreign earnings for year when
employee resident, but not ordinarily resident, in UK).
10
(9)
In this section—

“employer-financed retirement benefits scheme”, and

“relevant benefits”,

have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see
sections 393A and 393B of that Act).”
15
11
In section 268(7)(b) (early conversion or surrender of rights: life policies not
covered), for “an approved scheme, as defined in Chapter 1 of Part 14;”
substitute “a registered pension scheme;”.
12
In section 273 (payments securing annuities), for “, 617(3) and 619(6)”
substitute “and 617(3) and sections 188 to 190 of the Finance Act 2004”.
20
13
In section 336(1A)(b) (temporary residents not liable under certain pension
tax provisions)—
(a)
in sub-paragraph (i), for “605, 609, 610, 611, 623 or 629 of that Act
applies,” substitute “609, 610, 611 or 629 of that Act applies,”,
(b)
after that sub-paragraph insert—
25
“(ia)
an annuity under an annuity contract that is a
registered pension scheme, or”, and
(c)
omit sub-paragraph (iii) and the word “or” before it.
14
In section 348(1A)(b) (payments out of profits or gains brought into charge
to income tax: exception for certain annuities), for “605 of that Act applies to
30
it (retirement annuity contracts: annuities),” substitute “579A of that Act
applies to it because it is an annuity under an annuity contract that is a
registered pension scheme,”.
15
In section 349(1A)(b) (payments not out of profits or gains brought into
charge to income tax and annual interest: exception for certain annuities), for
35
“605 of that Act applies to it,” substitute “579A of that Act applies to it
because it is an annuity under an annuity contract that is a registered
pension scheme,”.
16    (1)
Section 349B(3) (payments in case of which requirement to deduct tax does
not apply) is amended as follows.
40
      (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:
45
exception from rule about trusts for certain pension scheme trusts), for “an

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
477

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”
substitute “a registered pension scheme”.
5
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,”.
20
For section 431B (life assurance: meaning of “pension business”)
10
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
purposes of a registered pension scheme or is the reinsurance of such
15
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
is to be treated as ceasing to be pension business at the beginning of
20
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)
substitute—
25
“(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 147(5) of the
Finance Act 2004) are secured or any annuity contract which
constitutes a registered pension scheme or is issued or held in
30
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”.
      (3)
After that subsection insert—
35
“(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
scheme, any of the friendly society’s life assurance business that was
40
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:
45
disregard of certain annuities for purposes of limit), for “approved annuities
(as defined in section 620(9))” substitute “annuity contract which constitutes

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
478

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 147(5) of the Finance Act 2004)”.
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
5
substitute—
“(b)
section 833(4)(c) (income regarded as earned income), and
(c)
section 185(2)(b) of the Finance Act 2004 (income regarded as
relevant UK earnings for pension purposes).”
25
In section 539(2) (policies of life insurance to which Chapter 2 of Part 13)
10
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”.
26
In section 613(4) (parliamentary pension funds)—
(a)
omit “respective” and paragraphs (b) to (d), and
15
(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.
      (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
20
273;”.
      (3)
For paragraphs (d) to (f) substitute—
“(d)
to any annuity under, or purchased with sums or assets held
for the purposes of, a registered pension scheme; or
(e)
to any annuity purchased by any person in recognition of
25
another’s services (or past services) in any office or
employment.”
28    (1)
Section 660A (income arising under a settlement where settlor retains an
interest) is amended as follows.
      (2)
In subsection (9), for paragraph (c) and the word “or” before it substitute “or
30
(c)
a benefit under a relevant pension scheme.”
      (3)
For subsections (11) and (12) substitute—
“(11)
In this section “relevant pension scheme” means—
(a)
a registered pension scheme;
(b)
a pension scheme established by a government outside the
35
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
(c)
a pension scheme of any description which may be
prescribed by regulations made by the Secretary of State.”
40
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)—
45
(a)
for “exemptions” substitute “exemption”, and

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
479

(b)
for “as mentioned in sub-paragraph (i) or (ii) of that paragraph do”
substitute “for the purposes of a superannuation fund to which
section 615(3) applies does”.
30
In section 715(1)(k) (exceptions from section 713 where exemption could be
allowed under section 592(2)), for “section 592(2)” substitute “section 182 of
5
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
(4) or section 182 of the Finance Act 2004.”
10
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 182 of the Finance Act 2004.”
33
In section 824(9) (repayment supplements), after “settlement” insert “,
scheme administrators of registered pension schemes”.
15
34
In section 828 (orders and regulations), after subsection (5) insert—
“(6)
Nothing in this section applies in relation to any of the following (in
relation to which section 276 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;
20
(b)
any statutory instrument containing any order or regulations
made by the Treasury or the Board under that Part of that
Act.”
35    (1)
Section 832(1) (interpretation of the Tax Acts) is amended as follows.
      (2)
After the definition of “the rate applicable to trusts” insert—
25

““registered pension scheme” has the meaning given by section 147(2)
of the Finance Act 2004;”.
      (3)
After the definition of “Schedule A business” insert—

““scheme administrator”, in relation to a pension scheme, has the
meaning given by section 264 of the Finance Act 2004 (but see also
30
sections 265 to 268 of that Act);”.
36
In section 840A(1)(b)(iv) (definition of “bank”: exclusion of insurance
companies), for “659B(1);” substitute “269 of the Finance Act 2004;”.
Finance Act 1990 (c. 29)
37
In section 25(9) of the Finance Act 1990 (donations to charity by individual:
35
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
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
40
2004);”,

and, in paragraph (c), for “that Act” substitute “the Taxes Act 1988”.
Taxation of Chargeable Gains Act 1992 (c. 12)
38
The Taxation of Chargeable Gains Act 1992 is amended as follows.

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
480

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)”.
40
For sections 239A and 239B (cessation of approval of retirement benefits
schemes and withdrawal of approval of personal pension arrangements)
5
substitute—
“Registered pension schemes
239A De-registration of registered pension schemes
(1)
This section applies where tax is charged in accordance with section
238 of the Finance Act 2004 (de-registration charge) where the
10
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—
(a)
are treated as having been acquired at the relevant time for a
consideration equal to the amount on which tax is charged by
15
virtue of section 238 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
(b)
are not to be treated as having been disposed of by any
person at the relevant time.
20
(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
exchange” insert—

““registered pension scheme” has the meaning given by section 147(2)
25
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.
      (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
30
superannuation fund to which section 615(3) of the Taxes Act applies or an
occupational pension scheme (within the meaning of section 147(5) of the
Finance Act 2004) that is not a registered pension scheme”.
      (3)
Omit sub-paragraph (8).
Finance Act 1996 (c. 8)
35
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
in question.”
40
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

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
481

1988)” substitute “an occupational pension scheme (within the meaning of
section 147(5) of the Finance Act 2004)”.
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.
5
      (2)
In sub-paragraph (4), for the definition of “individual pension account”
substitute—

““individual pension account” has the meaning given by
regulations made by the Commissioners of Inland Revenue;”.
      (3)
After that sub-paragraph insert—
10
“(5)
Regulations under sub-paragraph (4) shall be made by statutory
instrument which shall be subject to annulment in pursuance of a
resolution of the House of Commons.”
Capital Allowances Act 2001 (c. 2)
47
The Capital Allowances Act 2001 is amended as follows.
15
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)
substitute—
“(d)
sections 184 to 190 of FA 2004 (contributions under
registered pension schemes), and”.
20
49
In Part 1 of Schedule 1 (abbreviations) insert at the end—

“FA 2004
The Finance Act 2004

(c. )”.

Finance Act 2002 (c. 23)
50
The Finance Act 2002 is amended as follows.
25
51
In paragraph 4(2)(c) of Schedule 22 (computation of profits: adjustment on
change of basis)—
(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
30
(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—
35
“(d)
section 240(2) of the Finance Act 2004 (expenditure on
benefits under employer-financed retirement benefits
schemes).”

Finance Bill
Schedule 33 — Pension schemes etc: minor and consequential amendments
482

53
In paragraph 114, for sub-paragraph (3) substitute—
“(3)
For the purposes of this paragraph “pension
contributions” means—
(a)
sums paid by an employer by way of
contributions under a registered pension
5
scheme,
(b)
sums paid to the trustees or managers of a
registered pension scheme that are treated as
if they were the payment of contributions
under the pension scheme (see section 195 of
10
the Finance Act 2004), or
(c)
expenses within section 240(3) of the Finance
Act 2004 (expenditure on benefits under
employer-financed retirement benefits
schemes).”
15
Income Tax (Earnings and Pensions) Act 2003 (c. 1)
54
The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.
55
In section 23(3) (calculation of “chargeable overseas earnings”), in Step 2, for
paragraphs (b) and (c) substitute—
“(b)
sections 184 to 190 of FA 2004 (contributions to registered
20
pension schemes), or”.
56
In section 54(1) (calculation of deemed employment payment), in Step 5, for
“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
25
employment), for “relevant earnings of the worker for the purposes of
section 644 of ICTA (relevant earnings for purposes of permissible pension
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),
30
for the references to sections 592(7) and 594 of ICTA substitute—

“sections 184 to 190 of FA 2004 (contributions to registered pension
schemes), or”.
59
In section 315(5) (limited exemption for expenses connected with certain
living accommodation), in Step 3, for paragraph (b) substitute—
35
“(b)
sections 184 to 190 of FA 2004 (contributions to registered
pension schemes), or”.
60    (1)
Section 327 (deductions from earnings: general) is amended as follows.
      (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
40
substitute “and

sections 184 to 190 of FA 2004 (contributions to registered pension
schemes).”
61
In section 381 (deductions from seafarers’ earnings: taking account of other