|
| |
|
(c) | 5% of the aggregate of the amounts of the lump sums on |
| |
which there is no liability to income tax to which the |
| |
member has become entitled in connection with scheme |
| |
pensions under the pension scheme before his death. |
| |
(4) | But if the member became (actually) entitled to a scheme pension |
| 5 |
under the pension scheme during the pre-death year, sub- |
| |
paragraph (3)(a) has effect as if the amount of that scheme pension |
| |
which was payable to the member under the pension scheme in |
| |
the pre-death year were the amount which would have been |
| |
payable to him in the period of 12 months beginning with the date |
| 10 |
on which he became entitled to it had he not died. |
| |
(5) | The “appropriate portion” of the initial member pension limit, in |
| |
relation to any pension payable under the pension scheme to a |
| |
dependant of the member in the post-death year, is—![equation: over[char[P],times[char[A],char[P]]]](missing.gif) |
| |
| 15 |
P is the amount of that pension payable in the post-death |
| |
| |
AP is the aggregate of the amounts of each of the pensions |
| |
payable under the pension scheme to dependants of the |
| |
member in the post-death year. |
| 20 |
16C (1) | Where a pension is payable under the pension scheme to a |
| |
dependant of the member, otherwise than in excepted |
| |
| |
(a) | the period of 12 months beginning with the end of the post- |
| |
| 25 |
(b) | any succeeding period of 12 months, |
| |
| (“the 12 months in question”), so much of the pension as exceeds |
| |
the current member pension limit is not a dependants’ scheme |
| |
| |
| 30 |
(a) | more than one pension is so payable to one of the |
| |
dependants in the 12 months in question, or |
| |
(b) | pensions are so payable to more than one dependant of the |
| |
member in the 12 months in question, |
| |
| (or both), so much of any of the pensions as exceeds the |
| 35 |
appropriate portion of the current member pension limit is not a |
| |
dependants’ scheme pension. |
| |
(3) | “Excepted circumstances” means— |
| |
(a) | that at the beginning of the period of 12 months in question |
| |
there are at least 50 pensioner members of the pension |
| 40 |
| |
(b) | that the condition in subsection (4) is met. |
| |
(4) | The condition in this subsection is met if — |
| |
(a) | the difference between CYP and PYP in the case of each |
| |
relevant existing pension is the same amount, |
| 45 |
|
| |
|
| |
|
(b) | the difference between CYP and PYP in the case of each |
| |
relevant existing pension is the same percentage of PYP, or |
| |
(c) | in the case of each relevant existing pension the difference |
| |
between CYP and PYP is the aggregate of a percentage of |
| |
PYP and an amount which are both the same as those the |
| 5 |
aggregate of which make up the difference between CYP |
| |
and PYP in the case of each other relevant existing pension. |
| |
| |
“relevant existing pension” means a pension payable to any |
| |
dependant of any member under the pension scheme |
| 10 |
throughout the 12 months in question and the immediately |
| |
preceding period of 12 months, |
| |
CYP, in relation to a relevant existing pension, is the current |
| |
year pension, that is the amount of the pension payable in |
| |
the 12 months in question, and |
| 15 |
PYP, in relation to a relevant existing pension, is the previous |
| |
year pension, that is the amount of the pension payable in |
| |
the immediately preceding period of 12 months. |
| |
(6) | The “current member pension limit”, in relation to the 12 month |
| |
period in question, is the initial member pension limit increased |
| 20 |
| |
(a) | the permitted margin, and |
| |
(b) | the excepted circumstances amount. |
| |
(7) | The “permitted margin” is the amount by which the initial |
| |
member pension limit would be greater if it had been increased by |
| 25 |
whichever of calculation A and calculation B gives the greater |
| |
| |
(8) | Calculation A involves increasing the initial member pension limit |
| |
by the relevant annual percentage rate for the whole of the |
| |
| 30 |
(a) | beginning with the first month beginning after the end of |
| |
the post-death year (“the opening month”), and |
| |
(b) | ending with the first month of the 12 months in question |
| |
| |
(9) | The relevant annual percentage rate is— |
| 35 |
(a) | if the relevant valuation factor in relation to the pension |
| |
scheme is a number greater than 20, the annual rate agreed |
| |
by the Inland Revenue and the scheme administrator, and |
| |
(b) | otherwise, 5% per annum. |
| |
(10) | Calculation B involves increasing the initial member pension limit |
| 40 |
by the relevant indexation percentage. |
| |
(11) | If the retail prices index for the closing month is higher than it was |
| |
for the opening month, the relevant indexation percentage is the |
| |
percentage increase in the retail prices index. |
| |
(12) | If it is not, the relevant indexation percentage is 0%. |
| 45 |
(13) | The “excepted circumstances amount” is the aggregate of the |
| |
amounts of the relevant increases in pensions which were payable |
| |
|
| |
|
| |
|
under the pension scheme to dependants of the member in |
| |
excepted circumstances in any period or periods within |
| |
subsection (1)(a) or (b). |
| |
(14) | The relevant increase in the case of any pension payable in relation |
| |
to any 12 month period under the pension scheme to a dependant |
| 5 |
of the member is the difference between CYP and PYP (for this |
| |
purpose reading the references in subsection (5) to the 12 months |
| |
in question as references to the 12 month period). |
| |
(15) | The “appropriate portion” of the current member pension limit, in |
| |
relation to any pension payable under the pension scheme to a |
| 10 |
dependant of the member in the 12 months in question, is—![equation: over[char[P],times[char[A],char[P]]]](missing.gif) |
| |
| |
P is the amount of that pension payable in the 12 months in |
| |
| |
AP is the aggregate of the amounts of each of the pensions |
| 15 |
payable under the pension scheme to one or more |
| |
dependants of the member in the 12 months in question.” |
| |
Lifetime annuities and dependants’ annuities purchased together |
| |
29 (1) | Paragraph 17 of Schedule 28 (dependants’ annuity) is amended as follows. |
| |
(2) | In sub-paragraph (1) (meaning of “dependants’ annuity), before paragraph |
| 20 |
| |
“(za) | it is purchased either together with a lifetime annuity |
| |
payable to the member or after the member’s death,”. |
| |
(3) | After that sub-paragraph insert— |
| |
“(1A) | For the purposes of sub-paragraph (1)(za) a dependants’ annuity |
| 25 |
is purchased together with a lifetime annuity if the dependant’s |
| |
annuity is related to the lifetime annuity.” |
| |
30 (1) | Paragraph 3 of Schedule 29 (pension commencement lump sum: applicable |
| |
amount) is amended as follows. |
| |
(2) | In sub-paragraph (4) (applicable amount where member entitled to lifetime |
| 30 |
annuity to be one third of purchase price), for “of the annuity” substitute “of |
| |
the lifetime annuity and any related dependants’ annuity”. |
| |
(3) | After that sub-paragraph insert— |
| |
“(4A) | For the purposes of this Part a dependants’ annuity is related to a |
| |
lifetime annuity payable to a member of a registered pension |
| 35 |
| |
(a) | if they are purchased either in the form of a joint life |
| |
annuity or separately in circumstances in which the day on |
| |
which the one is purchased is no earlier than seven days |
| |
before, and no later than seven days after, the day on |
| 40 |
which the other is purchased, and |
| |
(b) | the dependant’s annuity will be payable to a dependant of |
| |
| |
|
| |
|
| |
|
31 | In the table in section 216(1) (benefit crystallisation events and amounts |
| |
crystallised), in benefit crystallisation event 4 (becoming entitled to lifetime |
| |
annuity), in column 2 (amount crystallised), insert at the end “and any |
| |
related dependants’ annuity”. |
| |
32 | In paragraph 4(1) of Schedule 32 (benefit crystallisation events 4: lifetime |
| 5 |
annuity purchased from unsecured pension fund), for “is” substitute “or a |
| |
related dependants’ annuity is, or both the lifetime annuity and a related |
| |
dependants’ annuity are,”. |
| |
33 | In the table in section 280(2) (index of defined expressions), insert at the |
| |
| 10 |
| “related dependants’ annuity |
| paragraph 3(4A) of Schedule 29”. |
| | |
|
Pension commencement lump sums |
| |
34 (1) | Paragraph 1 of Schedule 29 (meaning of “pension commencement lump |
| |
sum”) is amended as follows. |
| |
(2) | In sub-paragraph (3)(b) (member must become entitled to lump sum in |
| 15 |
connection with becoming entitled to relevant pension: lump sum and |
| |
pension to be under same arrangement), for “under the arrangement” |
| |
substitute “, otherwise than by virtue of the operation of paragraph 8(2) of |
| |
Schedule 28, under the pension scheme”. |
| |
(3) | After sub-paragraph (5) insert— |
| 20 |
“(6) | The Board of Inland Revenue may by regulations provide that, |
| |
where incorrect income tax has been paid by the scheme |
| |
administrator in relation to the member by way of the lifetime |
| |
allowance charge in circumstances prescribed by the regulations, |
| |
a lump sum subsequently paid to the member in circumstances so |
| 25 |
prescribed is to be treated as a pension commencement lump sum |
| |
even though either or both of the conditions in sub-paragraph |
| |
(1)(c) and (e) are not met.” |
| |
35 (1) | Paragraph 3 of Schedule 29 (applicable amount limit) is amended as follows. |
| |
(2) | For sub-paragraph (5) (annuity purchase price: sums and assets to be |
| 30 |
| |
“(5) | There is to be deducted from that aggregate— |
| |
(a) | if the sums or assets applied in (or in connection with) the |
| |
purchase of the annuity or any related dependants’ |
| |
annuity consist of or include sums or assets representing |
| 35 |
the whole or part of the member’s unsecured pension |
| |
fund, the aggregate of the amount of those sums and the |
| |
market value of those assets, and |
| |
(b) | in any case, so much (if any) of the sums or assets applied |
| |
in (or in connection with) the purchase of the annuity or |
| 40 |
any related dependants’ annuity as represents rights |
| |
which are attributable to a disqualifying pension credit.” |
| |
(3) | In sub-paragraph (7) (scheme pensions), in the definition of AC, insert at the |
| |
end “(disregarding paragraph 3 of Schedule 32).” |
| |
|
| |
|
| |
|
| |
36 | In section 169 (recognised transfers), after subsection (1) insert— |
| |
“(1A) | A transfer of sums or assets held for the purposes of, or representing |
| |
accrued rights under, a registered pension scheme to an insurance |
| |
company is to be treated as a recognised transfer if the sums or assets |
| 5 |
had been applied by the pension scheme towards the provision of a |
| |
scheme pension or a dependants’ scheme pension (but subject to |
| |
regulations under subsections (1B) and (1C)). |
| |
(1B) | The Board of Inland Revenue may by regulations provide that, |
| |
where any of the sums or assets transferred represent rights in |
| 10 |
respect of a scheme pension to which a member of a registered |
| |
pension scheme has become entitled (“the original scheme |
| |
| |
(a) | the transfer is not a recognised transfer unless those sums |
| |
and assets are, after the transfer, applied towards the |
| 15 |
provision of a scheme pension (a “new scheme pension”), |
| |
| |
(b) | if they are so applied, 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 |
| 20 |
it were the original scheme pension. |
| |
(1C) | The Board of Inland Revenue may by regulations provide that, |
| |
where any of the sums or assets transferred represent rights in |
| |
respect of a dependants’ scheme pension to which a dependant of a |
| |
member of a registered pension scheme has become entitled in |
| 25 |
respect of the member (“the original dependants’ scheme |
| |
| |
(a) | the transfer is not a recognised transfer unless those sums |
| |
and assets are, after the transfer, applied towards the |
| |
provision of a dependants’ scheme pension (a “new |
| 30 |
dependants’ scheme pension”), and |
| |
(b) | if they are so applied, the new dependants’ 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 dependants’ scheme |
| 35 |
| |
(1D) | The Board of Inland Revenue may by regulations provide that, |
| |
where any of the sums or assets transferred represent— |
| |
(a) | a person’s unsecured pension fund or dependant’s |
| |
unsecured pension fund, or |
| 40 |
(b) | a person’s alternatively secured pension fund or dependant’s |
| |
alternatively secured pension fund, |
| |
| under an arrangement (“the old arrangement”), the transfer is not a |
| |
recognised transfer unless all of those sums and assets become held |
| |
under an arrangement under which no other sums or assets are held |
| 45 |
| |
(1E) | If regulations so provide they may make in relation to cases in which |
| |
the sums and assets become so held provision as to the treatment for |
| |
the purposes of any provision of this Part of— |
| |
|
| |
|
| |
|
(a) | the sums and assets transferred, and |
| |
| |
| including provision for treating the sums and assets transferred as |
| |
remaining, to such extent as is prescribed by the regulations and for |
| |
such of the purposes of this Part as are so prescribed, sums and assets |
| 5 |
held under the old arrangement.” |
| |
| |
37 (1) | Section 172 (assignment of benefit to which member has actual or |
| |
prospective entitlement to constitute unauthorised payment) is amended as |
| |
| 10 |
(2) | In subsection (1) (members), for the words after “agrees to assign” |
| |
| |
“(a) | any benefit, other than an excluded pension, to which the |
| |
member (or any dependant of the member) has an actual or |
| |
prospective entitlement under the pension scheme, or |
| 15 |
(b) | any right in respect of any sums or assets held for the |
| |
purposes of any arrangement under the pension scheme.” |
| |
(3) | In subsection (3) (other persons), for the words after “agrees to assign” |
| |
| |
“(a) | any benefit, other than an excluded pension, to which the |
| 20 |
person has an actual or prospective entitlement under the |
| |
pension scheme in respect of a member of the pension |
| |
| |
(b) | any right in respect of any sums or assets held for the |
| |
purposes of any arrangement relating to the member under |
| 25 |
| |
(4) | In subsection (5)(b) (amount of unauthorised payment), insert at the end |
| |
“and any power to reduce the entitlement to the benefit or right did not |
| |
| |
(5) | In subsection (6) (payments of benefits assigned not unauthorised |
| 30 |
payments), after “benefit” insert “or right”. |
| |
(6) | For subsection (7) substitute— |
| |
“(7) | An excluded pension is so much of any pension which under |
| |
pension rule 2 may continue to be paid after the member’s death as |
| |
| 35 |
Surrender and allocation of rights etc. |
| |
38 | After section 172 insert— |
| |
| |
(1) | Subsection (2) applies if a member of a registered pension scheme |
| |
surrenders or agrees to surrender— |
| 40 |
(a) | any benefit, other than an excluded pension, to which the |
| |
member (or any dependant of the member) has a prospective |
| |
entitlement under an arrangement under the pension |
| |
| |
|
| |
|
| |
|
(b) | any right in respect of any sums or assets held for the |
| |
purposes of any arrangement under the pension scheme. |
| |
(2) | The pension scheme is to be treated as making an unauthorised |
| |
| |
(3) | Subsection (4) applies if a person surrenders or agrees to surrender— |
| 5 |
(a) | any benefit, other than an excluded pension, to which the |
| |
person has a prospective entitlement under an arrangement |
| |
under the pension scheme relating to a member of a pension |
| |
| |
(b) | any right in respect of any sums or assets held for the |
| 10 |
purposes of any arrangement relating to a member of the |
| |
pension scheme under the pension scheme. |
| |
(4) | The pension scheme is to be treated as making an unauthorised |
| |
payment to the person in respect of the member. |
| |
(5) | Subsections (2) and (4) do not apply to— |
| 15 |
(a) | a surrender pursuant to a pension sharing order or provision, |
| |
(b) | a surrender (or agreement to surrender) by the member in |
| |
return for the conferring on a dependant of an entitlement to |
| |
benefits after the member’s death, |
| |
(c) | a transfer of (or agreement to transfer) benefits or rights so as |
| 20 |
to become benefits or rights under another arrangement |
| |
under the pension scheme relating to the member or |
| |
| |
(d) | a surrender of (or agreement to surrender) benefits or rights |
| |
in order to fund the making of an authorised surplus |
| 25 |
| |
(e) | a surrender (or agreement to surrender) which constitutes an |
| |
assignment (or agreement to assign) within section 172, or |
| |
(f) | any surrender (or agreement to surrender) of a description |
| |
prescribed by regulations made by the Board of Inland |
| 30 |
| |
(6) | Regulations under subsection (5)(f) may include provision having |
| |
effect in relation to times before they are made. |
| |
(7) | Subsections (2) and (4) do not apply to the surrender of a benefit to |
| |
which the member (or a dependant of the member) has a prospective |
| 35 |
entitlement, or to which the person has a prospective entitlement in |
| |
respect of a member, under an arrangement that is a defined benefits |
| |
arrangement or cash balance arrangement unless— |
| |
(a) | in consequence of the surrender, the actual or prospective |
| |
entitlement of another member (or dependant of another |
| 40 |
member) of the pension scheme, or of another person in |
| |
respect of another member, to benefits under the scheme is |
| |
| |
(b) | the two members are or have been connected persons. |
| |
(8) | The amount of the unauthorised payment is the consideration that |
| 45 |
might be expected to be received if what is surrendered were |
| |
assigned by a transaction between parties at arm’s length and any |
| |
power to reduce the entitlement to the benefit or right did not exist. |
| |
|
| |
|