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13 | After Schedule 29 insert— |
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Taxable property held by investment-regulated pension schemes |
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Investment-regulated pension schemes |
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Schemes other than occupational pension schemes |
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1 (1) | For the purposes of the taxable property provisions a registered |
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pension scheme which is not an occupational pension scheme is an |
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investment-regulated pension scheme if one or more of its |
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members meets the condition in sub-paragraph (2). |
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(2) | The condition is that either— |
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(b) | a person related to the member, |
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| is or has been able (directly or indirectly) to direct, influence or |
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advise on the manner of investment of any of the sums and assets |
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held for the purposes of an arrangement under the pension |
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scheme relating to the member. |
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(3) | In this Part “the taxable property provisions” means— |
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(a) | section 173(7A) (exception from benefit charge where |
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taxable property held by investment-regulated pension |
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(b) | section 174A and this Schedule, |
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(c) | sections 185A to 185I (income and gains from taxable |
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(d) | section 273ZA (member liability for scheme sanction |
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charge where pension scheme non-UK resident), and |
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(e) | paragraphs 37A to 37I of Schedule 36 (transitional |
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Occupational pension schemes |
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2 (1) | For the purposes of the taxable property provisions a registered |
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pension scheme which is an occupational pension scheme is an |
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investment-regulated pension scheme if— |
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(a) | there are 50 or fewer members of the pension scheme, and |
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one or more of those members meets the condition in sub- |
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(b) | at least 10% of the members of the pension scheme meet |
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(2) | The condition is that either— |
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(b) | a person related to the member, |
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| is or has been able (directly or indirectly) to direct, influence or |
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advise on the manner of investment of any of the sums and assets |
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held for the purposes of the pension scheme. |
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Separate self-controlled section |
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3 (1) | This paragraph applies in the case of an arrangement under a |
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registered pension scheme if— |
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(a) | the pension scheme is an occupational pension scheme, |
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(b) | the pension scheme is not an investment-regulated |
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pension scheme by virtue of paragraph 2, and |
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(c) | one or more members of the pension scheme meet the |
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condition in sub-paragraph (2). |
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(2) | The condition is that either— |
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(b) | a person related to the member, |
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| is or has been able (directly or indirectly) to direct, influence or |
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advise on the manner of investment of any sums or assets which |
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are linked to an arrangement relating to the member. |
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(3) | For the purposes of sub-paragraph (2) sums or assets are linked to |
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an arrangement relating to a member if— |
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(a) | they are held for the purposes of an arrangement under the |
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pension scheme relating to the member, but |
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(b) | they are not held for the purposes of the arrangement |
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merely by virtue of a just and reasonable apportionment of |
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the sums and assets held for the purposes of the pension |
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(4) | Where this paragraph applies the arrangement is to be treated for |
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the purposes of this Part as if it were an investment-regulated |
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(5) | The Treasury may by regulations— |
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(a) | amend sub-paragraph (3), and |
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(b) | provide for any of the provisions of this Part to apply to the |
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arrangement with modifications. |
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4 (1) | For the purposes of this Part of this Schedule a person is related to |
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a member of a pension scheme if— |
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(a) | the person and the member are connected persons, or |
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(b) | the person acts on behalf of the member or a person |
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connected with the member. |
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(2) | Section 839 of ICTA (connected persons) applies for the purposes |
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5 | Where sums or assets held for the purposes of an investment- |
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regulated pension scheme— |
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(a) | are held otherwise than for the purposes of the |
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administration or management of the pension scheme, and |
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(b) | would not, apart from this paragraph, be treated as held |
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for the purposes of any arrangement relating to a member |
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under the pension scheme, |
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| for the purposes of the taxable property provisions the sums or |
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assets are to be treated as held for the purposes of the |
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arrangements under the pension scheme by reference to the |
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respective rights under the scheme of the members to which the |
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6 | For the purposes of the taxable property provisions property is |
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(a) | it is residential property (see paragraphs 7 to 10), or |
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(b) | it is tangible moveable property (but subject to paragraph |
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7 (1) | Subject as follows, for the purposes of the taxable property |
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provisions “residential property” means— |
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(a) | a building that is used or suitable for use as a dwelling, |
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(b) | any land consisting of, or forming part of, the garden or |
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grounds of such a building (including a building on any |
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such land) which is used or intended for use for a purpose |
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connected with the enjoyment of the building, |
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(c) | hotel or similar accommodation (but see paragraph 14(2)), |
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| in the United Kingdom or elsewhere. |
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(2) | For the purposes of the taxable property provisions “building” |
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(b) | part of a building or structure. |
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8 (1) | For the purposes of the taxable property provisions a building |
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used for any of the following purposes is not residential |
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(a) | a home or other institution providing residential |
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accommodation for children; |
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(b) | a hall of residence for students; |
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(c) | a home or other institution providing residential |
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accommodation with personal care for persons in need of |
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personal care by reason of old age, disability, past or |
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present dependence on alcohol or drugs or past or present |
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(d) | a hospital or hospice; |
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(e) | a prison or similar establishment. |
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(a) | a building is used for a purpose specified in sub-paragraph |
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(b) | a building which is not in use was, immediately before it |
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ceased to be in use, used for such a purpose, or |
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(c) | a building which has never been in use is more suitable for |
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use for such a purpose than for use for any other purpose, |
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| no account is to be taken for the purposes of the taxable property |
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provisions of its suitability for use as a dwelling. |
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9 (1) | The Treasury may by order amend this Part of this Schedule to |
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specify descriptions of buildings which are, or are not, to be |
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treated as residential property. |
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(2) | An order under this paragraph which amends this Part of this |
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Schedule in a way that results in buildings becoming treated as not |
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being residential property may provide that the amendment has |
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effect from a date earlier than that on which the order was made. |
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10 (1) | Residential property is not taxable property in relation to a |
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pension scheme if Condition A or B is met. |
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(2) | Condition A is met if the property is (or, if unoccupied, is to be) |
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occupied by an employee who— |
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(a) | is neither a member of the pension scheme nor connected |
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(b) | is not connected with the employer, and |
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(c) | is required as a condition of employment to occupy the |
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(3) | Condition B is met if the property is (or, if unoccupied, is to be)— |
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(a) | occupied by a person who is neither a member of the |
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pension scheme nor connected with such a member, and |
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(b) | used in connection with business premises held as an |
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investment of the pension scheme. |
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(4) | Section 839 of ICTA (connected persons) applies for the purposes |
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Tangible moveable property |
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11 (1) | The Treasury may by order provide that, for the purposes of the |
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taxable property provisions, any specified description of tangible |
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moveable property is treated as not being taxable property. |
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(2) | An order under this paragraph may include provision having |
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effect in relation to times before it is made. |
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Acquisition and holding of taxable property |
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12 (1) | For the purposes of the taxable property provisions an |
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investment-regulated pension scheme acquires an interest in |
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property if it comes to hold the interest. |
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(2) | Sub-paragraph (1) applies however the pension scheme comes to |
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hold the interest, whether that is— |
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(a) | by act of the parties to a transaction, |
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(b) | by order of a court or other authority, |
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(c) | by or under any statutory provision, or |
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(3) | For instances of deemed acquisition, see paragraphs 27 to 29. |
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13 (1) | For the purposes of the taxable property provisions an |
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investment-regulated pension scheme holds an interest in |
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property if the scheme holds the interest directly or indirectly. |
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(2) | In the taxable property provisions references to a person holding |
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an interest in property include, in the case of— |
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(a) | an investment-regulated pension scheme, |
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(b) | an arrangement under a pension scheme, or |
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(c) | a trust which is not a pension scheme, |
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| references to the interest in the property being held for the |
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purposes of the pension scheme, the arrangement or the trust. |
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14 (1) | For the purposes of the taxable property provisions a person holds |
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an interest in property directly if the person (whether jointly, in |
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(a) | holds the property or any estate, interest, right or power in |
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(b) | has the right to use, or participate in arrangements relating |
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to the use of, that property or a description of property to |
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which that property belongs, or |
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(c) | has the benefit of any obligation, restriction or condition |
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affecting the value of any estate, interest, right or power in |
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| under the law of any country or territory. |
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(2) | But a person does not hold an interest in residential property |
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consisting of hotel accommodation directly unless— |
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(a) | the person holds part only of the hotel accommodation or |
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any estate, interest, right or power in or over such a part |
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and, as a result, any person has a right to use or occupy that |
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or any other part of the hotel accommodation, or |
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(b) | the person has a right to use, or participate in |
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arrangements relating to the use of, part only of the hotel |
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accommodation or a description of property to which that |
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(3) | For the purposes of the taxable property provisions a person holds |
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an interest in property directly if the person is entitled (whether |
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jointly, in common or alone) to receive payments determined by |
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reference to the value of or the income from the property. |
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(4) | Sub-paragraph (3) is subject to paragraph 15. |
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Exception to direct holding |
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15 (1) | A person does not hold an interest in taxable property directly by |
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virtue of paragraph 14(3) where Conditions A to C are met. |
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(a) | the person is entitled to receive the payments by virtue of |
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a policy of life insurance, a contract for a life annuity or a |
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capital redemption policy, and |
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(b) | the policy or contract is issued by an insurance company. |
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(3) | Condition B is that the property— |
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(a) | does not constitute a linked asset, or |
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(b) | has been appropriated by the insurance company to an |
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(a) | where the person is an occupational pension scheme, the |
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policy or contract, either by itself or taken together with |
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one or more associated policies, does not entitle the |
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pension scheme, either alone or together with one or more |
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associated persons, to receive payments representing 10% |
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or more of the market value of or the income from the |
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(b) | where the person is a pension scheme other than an |
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occupational pension scheme, the policy or contract, either |
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by itself or taken together with one or more associated |
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policies, does not entitle an arrangement under the |
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pension scheme, either alone or together with one or more |
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associated persons, to receive such payments, or |
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(c) | otherwise, the policy or contract does not entitle the person |
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to receive such payments. |
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(5) | But for the purposes of applying paragraph 14(3) for determining |
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whether a pension scheme holds an interest in taxable property |
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directly or indirectly, this paragraph does not apply if the purpose |
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or one of the purposes for which the person holds rights under the |
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policy or contract is to enable a member of the pension scheme or |
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a person connected with such a member to occupy or use the |
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(6) | For the purposes of sub-paragraph (4) “associated policy” means |
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a policy or contract which entitles an associated person to receive |
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payments determined by reference to the value of or the income |
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(7) | For the definition of “associated person” see paragraph 30. |
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(8) | For the purposes of this paragraph— |
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“capital redemption policy” means a contract made in the |
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course of a capital redemption business, as defined in |
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“internal linked fund” has the meaning given by— |
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(a) | the Interim Prudential Sourcebook for Insurers made |
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by the Financial Services Authority under FISMA |
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(b) | rules made by the Authority under that Act and |
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having effect for the time being in place of the |
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“linked asset” means an asset of the insurance company |
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which is identified in its records as an asset by reference to |
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the value of which benefits provided for under a policy or |
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contract are to be determined. |
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(9) | For the purposes of this paragraph an annuity is a life annuity if it |
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(a) | granted for consideration in money or money’s worth in |
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the ordinary course of a business of granting annuities on |
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(b) | payable for a term ending at a time ascertainable only by |
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reference to the end of a human life, |
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| and for this purpose it does not matter that the annuity may in |
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some circumstances end before or after the life. |
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16 (1) | For the purposes of the taxable property provisions a person holds |
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an interest in property indirectly if the person does not hold the |
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interest directly but (whether jointly, in common or alone)— |
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(a) | holds an interest in a person who holds the interest in the |
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(b) | holds an interest in a person who holds the interest in the |
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property indirectly by virtue of paragraph (a) or this |
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(2) | For the purposes of the taxable property provisions a person holds |
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an interest in another person if— |
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(a) | the person holds an interest, right or power in or over that |
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(b) | the person lends money to that other person to fund the |
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acquisition by that other person of an interest in taxable |
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(3) | But sub-paragraph (2)(b) does not apply where— |
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(a) | the loan is an authorised employer loan made by a pension |
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scheme to or in respect of a sponsoring employer (see |
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