|
| |
|
prescribed, as if it were the original dependants’ scheme |
| |
| |
(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 |
| 5 |
unsecured pension fund, or |
| |
(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 |
| 10 |
under an arrangement under which no other sums or assets are held |
| |
| |
(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— |
| 15 |
(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 |
| 20 |
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 |
| |
| 25 |
(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 |
| 30 |
(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 |
| 35 |
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 |
| 40 |
| |
(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 |
| 45 |
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 |
| |
| |
Surrender and allocation of rights etc. |
| 5 |
38 | After section 172 insert— |
| |
| |
(1) | Subsection (2) applies if a member of a registered pension scheme |
| |
surrenders or agrees to surrender— |
| |
(a) | any benefit, other than an excluded pension, to which the |
| 10 |
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. |
| 15 |
(2) | The pension scheme is to be treated as making an unauthorised |
| |
| |
(3) | Subsection (4) applies if a person surrenders or agrees to surrender— |
| |
(a) | any benefit, other than an excluded pension, to which the |
| |
person has a prospective entitlement under an arrangement |
| 20 |
under the pension scheme relating to a member of a pension |
| |
| |
(b) | any right in respect of any sums or assets held for the |
| |
purposes of any arrangement relating to a member of the |
| |
pension scheme under the pension scheme. |
| 25 |
(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— |
| |
(a) | a surrender pursuant to a pension sharing order or provision, |
| |
(b) | a surrender (or agreement to surrender) by the member in |
| 30 |
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 |
| |
to become benefits or rights under another arrangement |
| |
under the pension scheme relating to the member or |
| 35 |
| |
(d) | a surrender of (or agreement to surrender) benefits or rights |
| |
in order to fund the making of an authorised surplus |
| |
| |
(e) | a surrender (or agreement to surrender) which constitutes an |
| 40 |
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 |
| |
| |
(6) | Regulations under subsection (5)(f) may include provision having |
| 45 |
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 |
| |
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— |
| 5 |
(a) | in consequence of the surrender, the actual or prospective |
| |
entitlement of another member (or dependant of another |
| |
member) of the pension scheme, or of another person in |
| |
respect of another member, to benefits under the scheme is |
| |
| 10 |
(b) | the two members are or have been connected persons. |
| |
(8) | The amount of the unauthorised payment is the consideration that |
| |
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. |
| 15 |
(9) | In this section “surrender”, in relation to any benefit or right of a |
| |
member (or dependant of a member) of a pension scheme or other |
| |
person, includes any schemes, arrangements or understandings of |
| |
any kind (whether or not legally enforceable) the main purpose, or |
| |
one of the main purposes, of which is to reduce the member’s (or |
| 20 |
dependant’s), or person’s, entitlement to the benefit or right. |
| |
(10) | 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 |
| |
| |
(11) | Section 839 of ICTA (connected persons) applies for the purposes of |
| 25 |
| |
172B | Increase in rights of connected person on death |
| |
(1) | This section applies if— |
| |
(a) | at any time after the death of a relevant member of a |
| |
registered pension scheme, there is an increase in the pension |
| 30 |
rights of another member of the pension scheme which is |
| |
attributable to the death, and |
| |
(b) | the dead member and other member were connected persons |
| |
immediately before the death. |
| |
(2) | A member of a registered pension scheme is a relevant member if, |
| 35 |
immediately before his death, any of his rights under the pension |
| |
| |
(a) | rights to benefit to which the member (or any dependant of |
| |
the member) has a prospective entitlement under an |
| |
arrangement under the pension scheme, or |
| 40 |
(b) | rights representing the member’s unsecured pension fund, |
| |
alternatively secured pension fund, dependant’s unsecured |
| |
pension fund or dependant’s alternatively secured pension |
| |
fund in respect of an arrangement under the pension scheme. |
| |
(3) | There is at any time an increase in the pension rights of the other |
| 45 |
member of the pension scheme which is attributable to the death if— |
| |
(a) | the consideration which might be expected to be received in |
| |
respect of an assignment (or assignation) of the benefits to |
| |
|
| |
|
| |
|
which he is actually or prospectively entitled under the |
| |
pension scheme at that time, exceeds |
| |
(b) | the consideration which might be expected to be received in |
| |
respect of such an assignment (or assignation) immediately |
| |
| 5 |
| in consequence of the death (ignoring for the purposes of paragraphs |
| |
(a) and (b) any power to reduce the entitlement to the benefits). |
| |
(4) | The pension scheme is to be treated as making an unauthorised |
| |
payment to the other member (or to the other member’s personal |
| |
representatives) of an amount equal to the excess (but subject to |
| 10 |
| |
(5) | The amount which would (apart from this subsection) constitute the |
| |
unauthorised payment is to be reduced by so much of the excess as |
| |
| |
(a) | from the payment of any transfer lump sum death benefit in |
| 15 |
respect of the dead member so as to become held for the |
| |
purposes of, or to represent accrued rights under, an |
| |
arrangement relating to the other member, |
| |
(b) | from the other member becoming entitled to pension death |
| |
benefits or lump sum death benefits in respect of the dead |
| 20 |
| |
(c) | in any manner prescribed by regulations made by the Board |
| |
| |
(6) | Regulations under subsection (5)(c) may include provision having |
| |
effect in relation to times before they are made. |
| 25 |
(7) | This section does not apply if— |
| |
(a) | at the time of the increase mentioned in subsection (1)(a) |
| |
there at least 20 members of the pension scheme, and |
| |
(b) | the benefits to which each of them is actually or prospectively |
| |
entitled under the pension scheme are increased at the same |
| 30 |
rate in consequence of the death. |
| |
(8) | This section does not apply if the increase in the pension rights of the |
| |
other member is brought about by an assignment (or agreement to |
| |
assign) within section 172. |
| |
(9) | Section 839 of ICTA (connected persons) applies for the purposes of |
| 35 |
| |
172C | Allocation of unallocated employer contributions |
| |
(1) | This section applies if— |
| |
(a) | contributions are paid under a registered pension scheme by |
| |
an employer otherwise than in respect of any individual, |
| 40 |
(b) | in any tax year any of the contributions become held for the |
| |
purposes of the provision of benefits to or in respect of a |
| |
member of the pension scheme under any relevant |
| |
arrangement or arrangements (“the allocated contributions”), |
| |
(c) | the amount of the allocated contributions exceeds the |
| 45 |
| |
(d) | the member and the employer, or the member and any |
| |
person connected with the employer at any time during the |
| |
|
| |
|
| |
|
tax year, are connected persons at any time during the tax |
| |
| |
(2) | An arrangement is a relevant arrangement if it is— |
| |
(a) | a money purchase arrangement that is not a cash balance |
| |
| 5 |
(b) | a hybrid arrangement under which the benefits that may be |
| |
provided to or in respect of the member are, or include, |
| |
money purchase benefits other than cash balance benefits. |
| |
(3) | “The permitted maximum” is— |
| |
(a) | the maximum amount of relief to which the member is |
| 10 |
entitled under section 188 (relief for contributions) in respect |
| |
of relievable pension contributions paid during the tax year |
| |
| |
(b) | the amount of any contributions paid by employers under |
| |
any registered pension scheme in respect of the member in |
| 15 |
| |
(4) | But if the member is a also a member of one or more other registered |
| |
pension schemes, the permitted maximum in relation to each of the |
| |
registered pension schemes of which he is a member is—![equation: over[times[char[P],char[M]],char[N]]](missing.gif) |
| |
| 20 |
PM is the amount arrived at under subsection (3), and |
| |
N is the number of registered pension schemes of which he is a |
| |
| |
(5) | The pension scheme is to be treated as making an unauthorised |
| |
payment to the member (or to the member’s personal |
| 25 |
| |
(6) | The amount of the unauthorised payment is the amount by which |
| |
the amount of the allocated contributions exceeds the permitted |
| |
| |
(7) | Section 839 of ICTA (connected persons) applies for the purposes of |
| 30 |
| |
172D | Limit on increase in benefits |
| |
(1) | This section applies where, at any time during any pension input |
| |
period in respect of a relevant arrangement relating to a member of |
| |
an occupational pension scheme that is a registered pension scheme, |
| 35 |
| |
(a) | a sponsoring employer, or |
| |
(b) | a person connected with a sponsoring employer. |
| |
| |
| 40 |
(a) | the pension input amount for the pension input period in |
| |
respect of the relevant arrangement, exceeds |
| |
(b) | the notional unconnected person input amount for the |
| |
pension input period in respect of the relevant arrangement, |
| |
|
| |
|
| |
|
| the pension scheme is to be treated as making an unauthorised |
| |
payment to the member (or to the member’s personal |
| |
representatives) of an amount equal to the excess. |
| |
(3) | A relevant arrangement is an arrangement under the pension |
| |
| 5 |
(a) | a defined benefits arrangement, |
| |
(b) | a cash balance arrangement, or |
| |
(c) | a hybrid arrangement under which the benefits that may be |
| |
provided to or in respect of the member are, or include, |
| |
defined benefits or cash balance benefits. |
| 10 |
(4) | The pension input amount for a pension input period in respect of |
| |
the relevant arrangement is to be determined in accordance with— |
| |
(a) | sections 230 to 232 if the relevant arrangement is a cash |
| |
| |
(b) | sections 234 to 236 if it is a defined benefits arrangement, and |
| 15 |
(c) | section 237 if it is a hybrid arrangement, |
| |
| treating references in those sections to the individual as to the |
| |
member and treating section 237 as if the references to input amount |
| |
| |
(5) | The notional unconnected person input amount for the pension |
| 20 |
input period in respect of the relevant arrangement is what the |
| |
pension input amount, as so determined, would have been if the |
| |
member were connected with— |
| |
(a) | a sponsoring employer, or |
| |
(b) | a person connected with a sponsoring employer, |
| 25 |
| at no time during the pension input period. |
| |
(6) | Section 839 of ICTA (connected persons) applies for the purposes of |
| |
| |
Restriction of employers’ relief in respect of contributions |
| |
39 | After section 196 insert— |
| 30 |
“196A | Power to restrict relief |
| |
(1) | The Board of Inland Revenue may make regulations for restricting |
| |
the extent to which contributions paid by an employer under a |
| |
registered pension scheme in respect of an individual are subject to |
| |
relief in circumstances in which subsection (2) or (3) applies (or both |
| 35 |
| |
(2) | This subsection applies where any of the benefits which will or may |
| |
be payable to or in respect of the individual under the registered |
| |
pension scheme will be payable only if relevant benefits expected to |
| |
be so paid under an employer-financed retirement benefits scheme |
| 40 |
| |
(3) | This subsection applies where, because relevant benefits are or may |
| |
be payable to or in respect of the individual under an employer- |
| |
financed retirement benefits scheme, the aggregate of the amount of |
| |
any sums and the market value of any assets— |
| 45 |
(a) | held for the purposes of, or |
| |
|
| |
|
| |
|
(b) | representing accrued rights under, |
| |
| the registered pension scheme which may be transferred by way of a |
| |
recognised transfer in respect of the individual will or may be less |
| |
than it otherwise would be. |
| |
(4) | The reference in subsection (1) to contributions paid by an employer |
| 5 |
being subject to relief is to— |
| |
(a) | their being deductible in computing the amount of the profits |
| |
of the employer for the purposes of Part 2 of ITTOIA 2005 |
| |
(trading income) or Case I or II of Schedule D, |
| |
(b) | their being expenses of management of the employer for the |
| 10 |
purposes of section 75 of ICTA (expenses of management: |
| |
companies with investment business), or |
| |
(c) | their being brought into account at Step 1 in section 76(7) of |
| |
ICTA (expenses of insurance companies) in respect of the |
| |
| 15 |
| (depending on which is appropriate in relation to the employer). |
| |
| |
“employer-financed retirement benefits scheme”, and |
| |
| |
| have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see |
| 20 |
sections 393A and 393B of that Act).” |
| |
40 | After section 246 insert— |
| |
“246A | Case where no relief for provision by an employer |
| |
(1) | An employer’s expenses of providing relevant benefits to or in |
| |
respect of a present or former employee (“the employee”) under an |
| 25 |
employer-financed retirement benefits scheme (whether or not by |
| |
the making of contributions under the scheme) are not subject to |
| |
relief if subsection (2) applies. |
| |
(2) | This subsection applies where— |
| |
(a) | the provision of the relevant benefits results in a reduction in |
| 30 |
the benefits payable to or in respect of the employee under a |
| |
registered pension scheme, or |
| |
(b) | a reduction in the benefits payable to or in respect of the |
| |
employee under a registered pension scheme results in the |
| |
provision of the relevant benefits. |
| 35 |
(3) | But if the extent to which contributions paid by the employer under |
| |
the registered pension scheme in respect of the employee are subject |
| |
to relief has been restricted in accordance with regulations under |
| |
section 196A, the employer’s expenses of providing the relevant |
| |
benefits are not prevented from being subject to relief to the extent |
| 40 |
that is just and reasonable. |
| |
(4) | The references in this section to expenses of an employer being |
| |
subject to relief are to— |
| |
(a) | their being deductible in computing the amount of the profits |
| |
of the employer for the purposes of Part 2 of ITTOIA 2005 |
| 45 |
(trading income) or Case I or II of Schedule D, |
| |
|
| |
|