|
| |
|
(3) | The relevant proportion of the scheme sanction charge is—![equation: over[times[char[A],char[S],char[O]],times[char[U],char[M],char[P]]]](missing.gif) |
| |
| |
ASO is the amount subject to the order, that is the aggregate of |
| |
the market value of any property and the amount of any |
| |
money transferred, or the amount of the sum paid, towards a |
| 5 |
registered pension scheme pursuant to the order under |
| |
section 19(4) or 21(2)(a) of the Pensions Act 2004 or Article |
| |
15(4) or 17(2)(a) of the Pensions (Northern Ireland) Order |
| |
2005 in respect of the unauthorised member payment, and |
| |
UMP is the amount of the unauthorised member payment. |
| 10 |
(4) | But if ASO is greater than UMP, the relevant proportion of the |
| |
scheme sanction charge is the whole of it.” |
| |
Unauthorised member payments |
| |
5 | In section 161(5) (payment made to person who is connected with member, |
| |
or was connected with member at his death, to be treated as made in respect |
| 15 |
of member), after “scheme to” insert “or in respect of”. |
| |
Unauthorised payments: loans to person connected with member or sponsoring employer |
| |
6 (1) | Section 162 (meaning of “loan”) is amended as follows. |
| |
(2) | In subsection (3) (guarantee of loan to or in respect of member or sponsoring |
| |
employer to be treated as loan), after “scheme” insert “, or to or in respect of |
| 20 |
a person who is connected with a member or sponsoring employer of a |
| |
registered pension scheme but is not a member or sponsoring employer of |
| |
| |
(3) | In subsection (4) (debt of member or sponsoring employer not required to be |
| |
repaid at normal time to be treated as loan), after “registered pension |
| 25 |
scheme” insert “or a person who is connected with a member or sponsoring |
| |
employer of a registered pension scheme but is not a member or sponsoring |
| |
employer of the pension scheme”. |
| |
(4) | After subsection (5) insert— |
| |
“(6) | Section 839 of ICTA (connected persons) applies for the purposes of |
| 30 |
| |
Abatement of public service pensions |
| |
7 | In section 165(3) (when a person becomes entitled to a pension), insert at the |
| |
end (not as part of paragraph (b)) “and, for this purpose, the abatement of a |
| |
scheme pension under a public service pension scheme is not to be taken to |
| 35 |
affect the right to receive it.” |
| |
8 (1) | Schedule 32 (benefit crystallisation events: supplementary) is amended as |
| |
| |
(2) | In paragraph 9 (benefit crystallisation event 2: meaning of “P”), after sub- |
| |
|
| |
|
| |
|
| |
“(1A) | If the pension is under a public service pension scheme, any |
| |
abatement of the pension is to be left out of account in determining |
| |
the amount of the pension which will be payable for the purposes |
| |
| 5 |
(3) | After that paragraph insert— |
| |
“Benefit crystallisation event 3: disregarding abatement |
| |
9A | For the purposes of benefit crystallisation event 3, any abatement |
| |
of the scheme pension is to be left out of account in determining |
| |
for the purposes of column 1 — |
| 10 |
(a) | the increased annual rate of the pension, and |
| |
(b) | the rate at which it was payable on the day on which the |
| |
individual became entitled to it.” |
| |
(4) | In paragraph 11 (benefit crystallisation event 3: permitted margin in case of |
| |
post-5th April 2006 pension), after sub-paragraph (7) insert— |
| 15 |
“(8) | If the pension is under a public service pension scheme, any |
| |
abatement of the pension is to be left out of account in determining |
| |
for the purposes of this paragraph the annual amount of the |
| |
pension at the rate at which it was payable on the day on which the |
| |
individual became entitled to it.” |
| 20 |
(5) | In paragraph 12 (benefit crystallisation event 3: permitted margin in case of |
| |
pre-5th April 2006 pension), after sub-paragraph (3) insert— |
| |
“(4) | If the pension is under a public service pension scheme, any |
| |
abatement of the pension is to be left out of account in determining |
| |
for the purposes of this paragraph the annual amount of the |
| 25 |
pension at the rate at which it was payable on the day on which the |
| |
individual became entitled to it.” |
| |
(6) | In paragraph 13 (benefit crystallisation event 3: meaning of “XP”), after sub- |
| |
| |
“(3) | If the pension is under a public service pension scheme, any |
| 30 |
abatement of the pension is to be left out of account in determining |
| |
for the purposes of sub-paragraph (1)— |
| |
(a) | the increased annual rate of the pension, and |
| |
(b) | the rate at which it was payable on the day on which the |
| |
individual became entitled to it.” |
| 35 |
9 | In section 279(1) (definitions), before the definition of “the Board of Inland |
| |
| |
““abatement”, in relation to a scheme pension under a public |
| |
service pension scheme, means the reduction of the pension |
| |
(including its reduction to nil) in accordance with the rules of |
| 40 |
the pension scheme by reason of re-employment in public |
| |
| |
10 | In the table in section 280(2) (index of defined expressions), insert at the |
| |
|
| |
|
| |
|
| |
|
| |
11 (1) | Paragraph 2 of Schedule 28 (scheme pensions) is amended as follows. |
| |
(2) | Omit sub-paragraph (1) (special provisions for pension scheme with fewer |
| 5 |
| |
(3) | In sub-paragraph (2) (pension scheme with 50 or more members), for “In the |
| |
case of a pension scheme with 50 or more members, a” substitute “A”. |
| |
(4) | In sub-paragraph (3)(b) (no reduction in rate of pension)— |
| |
(a) | for “in respect of any” substitute “at any time during any”, and |
| 10 |
(b) | for “in respect of the previous 12 month period” substitute “at the |
| |
| |
(5) | After that sub-paragraph insert— |
| |
“(3A) | “The relevant time” is— |
| |
(a) | in the case of the first relevant 12 month period, the day on |
| 15 |
which the member becomes entitled to the pension, and |
| |
(b) | in the case of any other relevant 12 month period, |
| |
immediately before the beginning of that period.” |
| |
(6) | In sub-paragraph (4) (things not preventing condition in sub-paragraph (3) |
| |
being satisfied), omit “or” at the end of paragraph (b) and insert at the end— |
| 20 |
“(d) | the reduction of the pension in consequence of a pension |
| |
sharing order or provision, |
| |
(e) | forfeiture of entitlement to the pension in circumstances |
| |
prescribed by regulations made by the Board of Inland |
| |
| 25 |
(f) | the reduction of the pension in consequence of an order of |
| |
| |
(g) | if the pension is under a public service pension scheme, its |
| |
reduction by abatement, or |
| |
(h) | the reduction of the pension in any other circumstances |
| 30 |
prescribed by regulations made by the Board of Inland |
| |
| |
(7) | After that sub-paragraph insert— |
| |
“(4A) | In sub-paragraph (4) references to the reduction of a pension |
| |
include its ceasing to be payable (whether temporarily or |
| 35 |
| |
(8) | After sub-paragraph (6) insert— |
| |
“(6A) | The Board of Inland Revenue may by regulations provide that if— |
| |
(a) | a scheme pension payable by an insurance company |
| |
selected by the scheme administrator of a registered |
| 40 |
pension scheme (“the original scheme pension”) ceases to |
| |
| |
|
| |
|
| |
|
(b) | in consequence of the transfer of sums or assets (or both) |
| |
from the insurance company to another insurance |
| |
company in connection with the original scheme pension |
| |
ceasing to be payable, another scheme pension becomes |
| |
payable by the other insurance company (“the new scheme |
| 5 |
| |
| the new scheme pension is to be treated, to such extent as is |
| |
prescribed by the regulations and for such of the purposes of this |
| |
Part as are so prescribed, as if it were the original scheme |
| |
| 10 |
| |
“(8) | Regulations under sub-paragraph (4)(e) and (h) may include |
| |
provision having effect in relation to times before they are made.” |
| |
12 | In Schedule 28 (authorised pensions), after paragraph 2 insert— |
| |
“2A (1) | Where this paragraph applies in relation to a pension payable to |
| 15 |
the member, the pension scheme is to be treated as making an |
| |
unauthorised payment to the member of the appropriate amount. |
| |
(2) | This paragraph applies to a pension if it fails to satisfy the |
| |
condition in sub-paragraph (3) of paragraph 2— |
| |
(a) | by reason of not complying with paragraph (a) of that sub- |
| 20 |
| |
(b) | by reason of not complying with paragraph (b) of that sub- |
| |
paragraph because a substantial reduction occurs in the |
| |
| |
| or if it is a pension the rate of which is reduced in accordance with |
| 25 |
paragraph (b) of sub-paragraph (4) of paragraph 2 but the |
| |
reduction is part of avoidance arrangements. |
| |
(3) | For the purposes of sub-paragraph (2)(b) a substantial reduction |
| |
occurs in the rate of a pension if the rate at which the pension is |
| |
payable at any time during any relevant 12 month period (within |
| 30 |
the meaning of paragraph 2(7)) is less than 80% of the rate payable |
| |
when the member became entitled to the pension. |
| |
(4) | For the purposes of sub-paragraph (2) “avoidance arrangements” |
| |
includes schemes, arrangements and understandings of any kind |
| |
(whether or not legally enforceable) the main purpose, or one of |
| 35 |
the main purposes, of which is to increase the member’s |
| |
entitlement to a lump sum on which there is no liability to income |
| |
| |
(5) | “The appropriate amount”, in relation to the pension, is the |
| |
amount of any lump sum on which there is no liability to tax to |
| 40 |
which the member became entitled in connection with the |
| |
| |
(6) | Once this paragraph has applied in relation to the pension, it does |
| |
not apply in relation to it again. |
| |
(7) | The application of this paragraph in relation to the pension does |
| 45 |
not prevent any payments of the pension themselves being |
| |
unauthorised member payments.” |
| |
|
| |
|
| |
|
| |
13 (1) | Paragraph 3 of Schedule 28 (lifetime annuity) is amended as follows. |
| |
(2) | For sub-paragraph (1)(d) (lifetime annuity to be level annuity, increasing |
| |
annuity or relevant linked annuity) substitute— |
| |
“(d) | its amount either cannot decrease or falls to be determined |
| 5 |
in any manner prescribed by regulations made by the |
| |
Board of Inland Revenue.” |
| |
(3) | After sub-paragraph (2) insert— |
| |
“(2A) | An annuity does not fail to satisfy sub-paragraph (1)(d) by reason |
| |
of the operation of a pension sharing order or provision. |
| 10 |
(2B) | The Board of Inland Revenue may by regulations make provision |
| |
in relation to cases in which a lifetime annuity payable by an |
| |
insurance company (“the original lifetime annuity”) ceases to be |
| |
payable and in consequence of that— |
| |
(a) | sums or assets (or both) are transferred from the insurance |
| 15 |
company to another insurance company and are applied |
| |
towards the provision of either another lifetime annuity (a |
| |
“new lifetime annuity”) or a scheme pension, short-term |
| |
annuity, dependants’ scheme pension, dependants’ |
| |
annuity or dependants’ short-term annuity by the other |
| 20 |
| |
(b) | sums or assets are transferred to the relevant registered |
| |
| |
(2C) | The regulations may provide that— |
| |
(a) | in a case where a new lifetime annuity becomes payable, |
| 25 |
the new lifetime annuity is to be treated, to such extent as |
| |
is prescribed by the regulations and for such of the |
| |
purposes of this Part as are so prescribed, as if it were the |
| |
original lifetime annuity, and |
| |
(b) | in any other case, the relevant registered pension scheme is |
| 30 |
to be treated as making an unauthorised payment to the |
| |
member of an amount equal to the aggregate of the |
| |
amount of the sums, and the market value of the assets, |
| |
| |
(2D) | For the purposes of sub-paragraphs (2B) and (2C) a registered |
| 35 |
pension scheme is the relevant registered pension scheme if the |
| |
original lifetime annuity was acquired using sums or assets held |
| |
for the purposes of the pension scheme.” |
| |
(4) | Omit sub-paragraphs (3) to (6) (which define level annuity, increasing |
| |
annuity and relevant linked annuity). |
| 40 |
14 (1) | Paragraph 6 of Schedule 28 (short-term annuity) is amended as follows. |
| |
(2) | In sub-paragraph (1) (meaning of “short-term annuity”), for “An” substitute |
| |
“For the purposes of this Part an”. |
| |
(3) | For paragraph (e) of that sub-paragraph (short-term annuity to be level |
| |
|
| |
|
| |
|
annuity, increasing annuity or relevant linked annuity) substitute— |
| |
“(e) | its amount either cannot decrease or falls to be determined |
| |
in any manner prescribed by regulations made by the |
| |
Board of Inland Revenue.” |
| |
(4) | After that sub-paragraph insert— |
| 5 |
“(1A) | An annuity does not fail to satisfy sub-paragraph (1)(e) by reason |
| |
of the operation of a pension sharing order or provision. |
| |
(1B) | The Board of Inland Revenue may by regulations make provision |
| |
in relation to cases in which a short-term annuity payable by an |
| |
insurance company (“the original short-term annuity”) ceases to |
| 10 |
be payable and in consequence of that— |
| |
(a) | sums or assets (or both) are transferred from the insurance |
| |
company to another insurance company and are applied |
| |
towards the provision of either another short-term annuity |
| |
(a “new short-term annuity”) or a scheme pension, lifetime |
| 15 |
annuity, dependants’ scheme pension, dependants’ |
| |
annuity or dependants’ short-term annuity by the other |
| |
| |
(b) | sums or assets are transferred to the relevant registered |
| |
| 20 |
(1C) | The regulations may provide that— |
| |
(a) | in a case where a new short-term annuity becomes |
| |
payable, the new short-term annuity is to be treated, to |
| |
such extent as is prescribed by the regulations and for such |
| |
of the purposes of this Part as are so prescribed, as if it were |
| 25 |
the original short-term annuity, and |
| |
(b) | in any other case, the relevant registered pension scheme is |
| |
to be treated as making an unauthorised payment to the |
| |
member of an amount equal to the aggregate of the |
| |
amount of the sums, and the market value of the assets, |
| 30 |
| |
(1D) | For the purposes of sub-paragraphs (1B) and (1C) a registered |
| |
pension scheme is the relevant registered pension scheme if the |
| |
original short-term annuity was acquired using sums or assets |
| |
held for the purposes of the pension scheme.” |
| 35 |
(5) | Omit sub-paragraph (2) (which defines level annuity, increasing annuity |
| |
and relevant linked annuity). |
| |
15 (1) | Paragraph 17 of Schedule 28 (dependants’ annuity) is amended as follows. |
| |
(2) | In sub-paragraph (1) (meaning of “dependants’ annuity”), for “An” |
| |
substitute “For the purposes of this Part an”. |
| 40 |
(3) | For paragraph (c) of that sub-paragraph (dependants’ annuity to be level |
| |
annuity, increasing annuity or relevant linked annuity) substitute— |
| |
“(c) | its amount either cannot decrease or falls to be determined |
| |
in any manner prescribed by regulations made by the |
| |
Board of Inland Revenue,”. |
| 45 |
(4) | For sub-paragraph (2) (which defines level annuity, increasing annuity and |
| |
relevant linked annuity) substitute— |
| |
|
| |
|