|
| |
|
(c) | both the rights surrendered and the rights conferred under |
| |
the new arrangement consist of or include a prospective |
| |
entitlement to pension death benefits within section 167(1) or |
| |
lump sum death benefits within section 168(1) (or both), |
| |
(d) | the surrender and the making of the new arrangement |
| 5 |
constitute or form part of a transaction the purpose of which |
| |
is to secure that the activities of the pension scheme are |
| |
limited to retirement-benefit activities within the meaning of |
| |
section 255 of the Pensions Act 2004 or Article 232 of the |
| |
Pensions (Northern Ireland) Order 2005, and |
| 10 |
(e) | the rights surrendered and the rights conferred under the |
| |
new arrangement are not significantly different.” |
| |
Scheme pensions where ill-health condition met |
| |
7 (1) | Schedule 28 (pension rules) is amended as follows. |
| |
(2) | In paragraph 2(4) (scheme pensions: cases where cessation or reduction of |
| 15 |
pension is permitted), for paragraph (a) substitute— |
| |
“(a) | the reduction of the pension if the member became entitled |
| |
to it by reason of the ill-health condition being met,”. |
| |
(3) | In paragraph 2A(2) (certain reductions not permitted if part of avoidance |
| |
arrangements), for “the rate of which is reduced in accordance with |
| 20 |
paragraph (b) of sub-paragraph (4) of paragraph 2 but” substitute “which is |
| |
reduced in accordance with paragraph (a) of sub-paragraph (4) of paragraph |
| |
2, or the rate of which is reduced in accordance with paragraph (b) of that |
| |
| |
Unsecured and dependants’ unsecured pensions: reference periods |
| 25 |
8 (1) | Schedule 28 (pension rules) is amended as follows. |
| |
(2) | In paragraph 10 (reference periods for unsecured pensions), for sub- |
| |
paragraph (1) substitute— |
| |
“(1) | Subject as follows, the period of five unsecured pension years |
| |
beginning with the first unsecured pension year, and each |
| 30 |
succeeding period of five unsecured pension years, is a “reference |
| |
| |
(1A) | Sub-paragraph (1B) applies if, at any time during a reference |
| |
period (“the current reference period”), the member notifies the |
| |
scheme administrator that the member wishes a new reference |
| 35 |
period to begin on the next day that is an anniversary of the |
| |
reference date in relation to the current reference period. |
| |
(1B) | The scheme administrator may determine— |
| |
(a) | that the current reference period is to end immediately |
| |
before that day (so that sub-paragraph (1) no longer |
| 40 |
| |
(b) | that (subject to any further operation of this sub- |
| |
paragraph) the period of five unsecured pension years |
| |
beginning with that day, and each succeeding period of |
| |
five unsecured pension years, is to be a reference period. |
| 45 |
|
| |
|
| |
|
(1C) | The first day of each reference period is, in relation to that period, |
| |
| |
(3) | In paragraph 24 (reference periods for dependants’ unsecured pensions), for |
| |
sub-paragraph (1) substitute— |
| |
“(1) | Subject as follows, the period of five unsecured pension years |
| 5 |
beginning with the first unsecured pension year, and each |
| |
succeeding period of five unsecured pension years, is a “reference |
| |
| |
(1A) | Sub-paragraph (1B) applies if, at any time during a reference |
| |
period (“the current reference period”), the dependant notifies the |
| 10 |
scheme administrator that the dependant wishes a new reference |
| |
period to begin on the next day that is an anniversary of the |
| |
reference date in relation to the current reference period. |
| |
(1B) | The scheme administrator may determine— |
| |
(a) | that the current reference period is to end immediately |
| 15 |
before that day (so that sub-paragraph (1) no longer |
| |
| |
(b) | that (subject to any further operation of this sub- |
| |
paragraph) the period of five unsecured pension years |
| |
beginning with that day, and each succeeding period of |
| 20 |
five unsecured pension years, is to be a reference period. |
| |
(1C) | The first day of each reference period is, in relation to that period, |
| |
| |
Pension commencement lump sums |
| |
9 | In paragraph 1(1) of Schedule 29 (pension commencement lump sums)— |
| 25 |
(a) | in paragraph (a), after “to it” insert “before reaching the age of 75”, |
| |
(b) | in paragraph (c), for “three months” substitute “one year”, and |
| |
(c) | omit paragraph (e) (but not including the “and” at the end). |
| |
| |
10 (1) | Paragraph 10 of Schedule 29 (winding-up lump sums) is amended as |
| 30 |
| |
(2) | In sub-paragraph (1)(c), for “the member’s employer” substitute “any |
| |
person by whom the member is employed at the time when the lump sum is |
| |
paid, and who has made contributions under the pension scheme in respect |
| |
of the member within the period of five years ending with the day on which |
| 35 |
| |
(3) | In sub-paragraph (3)— |
| |
(a) | for “are that the employer” substitute “referred to in paragraph (c) of |
| |
sub-paragraph (1) are that the person mentioned in that paragraph”, |
| |
| 40 |
| |
| |
11 (1) | Schedule 29 (authorised lump sums) is amended as follows. |
| |
|
| |
|
| |
|
(2) | In paragraph 13(c) (defined benefits lump sum death benefit), for “day on |
| |
which the member died,” substitute “earlier of the day on which the scheme |
| |
administrator first knew of the member’s death and the day on which the |
| |
scheme administrator could first reasonably be expected to have known of |
| |
| 5 |
(3) | In paragraph 15(1)(c) (uncrystallised funds lump sum death benefit), for |
| |
“day on which the member died,” substitute “earlier of the day on which the |
| |
scheme administrator first knew of the member’s death and the day on |
| |
which the scheme administrator could first reasonably be expected to have |
| |
| 10 |
Taxable property held by investment-regulated pension schemes: indirect holdings in REITs |
| |
12 (1) | Schedule 29A (taxable property held by investment-regulated pension |
| |
schemes) is amended as follows. |
| |
(2) | In paragraph 20(1)(b) (indirect holdings: introduction to exception for |
| |
REITs), for “paragraph 22 makes” substitute “paragraphs 22, 24 and 25 |
| 15 |
| |
(3) | In paragraph 22 (REITs)— |
| |
(a) | in sub-paragraph (1), after paragraph (b) insert— |
| |
| “and paragraph 24 applies to the pension scheme’s interest |
| |
| 20 |
(b) | omit sub-paragraph (2). |
| |
(4) | In paragraph 24(1) (conditions applying for paragraph 23), for “paragraph |
| |
23” substitute “paragraphs 22 and 23”. |
| |
(5) | In paragraph 25(2) (provisions supplementing paragraph 24), for “23(1)” |
| |
| 25 |
Transitional provision: primary protection |
| |
13 | In paragraph 11D of Schedule 36 (lump sum death benefits to be taken into |
| |
account as part of individual’s pre-commencement rights only if paid under |
| |
policy not significantly varied since 5th April 2006), after sub-paragraph (2) |
| |
| 30 |
“(2A) | A variation of the terms of a policy of life insurance made in order |
| |
to comply with the Employment Equality (Age) Regulations 2006 |
| |
or Employment Equality (Age) Regulations (Northern Ireland) |
| |
2006 (or any regulations amending or replacing them) is to be |
| |
ignored for the purposes of sub-paragraph (2). |
| 35 |
(2B) | Where a policy of life insurance held on 5th April 2006 for the |
| |
purposes of an occupational pension scheme is surrendered and a |
| |
| |
(a) | as part of a retirement-benefit activities compliance |
| |
| 40 |
(b) | to comply with the Employment Equality (Age) |
| |
Regulations 2006 or Employment Equality (Age) |
| |
Regulations (Northern Ireland) 2006 (or any regulations |
| |
amending or replacing them), |
| |
|
| |
|
| |
|
| the new policy is to be treated for the purposes of sub-paragraph |
| |
(2) as if it were the same as the old. |
| |
(2C) | For this purpose a policy of life insurance is surrendered and a |
| |
new one is taken out as part of a retirement-benefit activities |
| |
| 5 |
(a) | the surrender of the old policy and taking out of the new |
| |
policy constitute or form part of a transaction the purpose |
| |
of which is to secure that the activities of the pension |
| |
scheme are limited to retirement-benefit activities within |
| |
the meaning of section 255 of the Pensions Act 2004 or |
| 10 |
Article 232 of the Pensions (Northern Ireland) Order 2005, |
| |
| |
(b) | the rights under the old policy and the new policy are not |
| |
significantly different.” |
| |
Transitional provision: enhanced protection |
| 15 |
14 | Schedule 36 (transitional provision) is amended as follows. |
| |
15 (1) | Paragraph 12 (when enhanced protection ceases) is amended as follows. |
| |
(2) | In paragraph (c) of sub-paragraph (2), for “solely for the purposes of a |
| |
permitted transfer” substitute “in permitted circumstances”. |
| |
(3) | After that sub-paragraph insert— |
| 20 |
“(2A) | An arrangement is made in permitted circumstances if it is |
| |
| |
(a) | for the purposes of a permitted transfer, |
| |
(b) | as part of a retirement-benefit activities compliance |
| |
| 25 |
(c) | as part of an age-equality compliance exercise. |
| |
(2B) | For the purposes of sub-paragraph (2A)(b) an arrangement (“the |
| |
new arrangement”) relating to an individual is made as part of a |
| |
retirement-benefit activities compliance exercise if— |
| |
(a) | it is made in connection with the cancellation of rights |
| 30 |
under another arrangement relating to the individual (“the |
| |
| |
(b) | the old arrangement and the new arrangement relate to the |
| |
| |
(c) | there is a prospective entitlement to pension death benefits |
| 35 |
within section 167(1) or lump sum death benefits within |
| |
section 168(1) (or both) under both the old arrangement |
| |
| |
(d) | the making of the new arrangement and the cancellation of |
| |
the old arrangement constitute or form part of a |
| 40 |
transaction the purpose of which is to secure that the |
| |
activities of the pension scheme under which the |
| |
arrangement is made are limited to retirement-benefit |
| |
activities within the meaning of section 255 of the Pensions |
| |
Act 2004 or Article 232 of the Pensions (Northern Ireland) |
| 45 |
| |
|
| |
|
| |
|
(e) | the rights cancelled under the old arrangement and the |
| |
rights conferred under the new arrangement are not |
| |
| |
(2C) | For the purposes of sub-paragraph (2A)(c) an arrangement (“the |
| |
new arrangement”) is made as part of an age-equality compliance |
| 5 |
| |
(a) | it is made in connection with the cancellation of rights |
| |
under another arrangement relating to the individual (“the |
| |
| |
(b) | the old arrangement and the new arrangement relate to the |
| 10 |
| |
(c) | there is a prospective entitlement to pension death benefits |
| |
within section 167(1) or lump sum death benefits within |
| |
section 168(1) (or both) under both the old arrangement |
| |
and the new arrangement, and |
| 15 |
(d) | the new arrangement is made, and the old arrangement |
| |
cancelled, in order to comply with the Employment |
| |
Equality (Age) Regulations 2006 or Employment Equality |
| |
(Age) Regulations (Northern Ireland) 2006 (or any |
| |
regulations amending or replacing them).” |
| 20 |
(4) | In sub-paragraph (7)— |
| |
| |
(b) | in paragraph (b), omit “held for the purposes of, or representing |
| |
accrued rights under, the arrangement”, and |
| |
(c) | in paragraph (c), for “those” (in both places) substitute “the”. |
| 25 |
(5) | In paragraph (a) of sub-paragraph (8), omit— |
| |
(a) | “, or two or more money purchase arrangements that are not cash |
| |
balance arrangements,”, and |
| |
| |
(6) | After paragraph (b) of that sub-paragraph insert— |
| 30 |
“(c) | where the arrangement is a cash balance arrangement or a |
| |
defined benefits arrangement relating to a present or |
| |
former employment, they are transferred in connection |
| |
with a relevant business transfer so as to become held for |
| |
the purposes of, or to represent rights under, a cash |
| 35 |
balance arrangement or defined benefits arrangement |
| |
made under a registered pension scheme or recognised |
| |
overseas pension scheme, or |
| |
(d) | where the arrangement (“the old arrangement”) is a cash |
| |
balance arrangement or a defined benefits arrangement, |
| 40 |
they are transferred as part of a retirement-benefit |
| |
activities compliance exercise so as to become held for the |
| |
purposes of, or to represent rights under, a cash balance |
| |
arrangement or defined benefits arrangement (“the new |
| |
arrangement”) relating to the same employment as the old |
| 45 |
arrangement and made under a registered pension scheme |
| |
or recognised overseas pension scheme.” |
| |
|
| |
|
| |
|
(7) | After that sub-paragraph insert— |
| |
“(8A) | For the purposes of sub-paragraph (8)(c) “relevant business |
| |
transfer” means a transfer of an undertaking or a business (or part |
| |
of an undertaking or a business) from one person to another— |
| |
(a) | which involves the transfer of at least 20 employees, and |
| 5 |
(b) | in the case of which, if the transferor and the transferee are |
| |
bodies corporate, they would not be treated as members of |
| |
the same group for the purposes of Chapter 4 of Part 10 of |
| |
| |
(8B) | For the purposes of sub-paragraph (8)(d) sums or assets held for |
| 10 |
the purposes of, or representing accrued rights under, the old |
| |
arrangement are transferred as part of a retirement-benefit |
| |
activities compliance exercise if— |
| |
(a) | there is a prospective entitlement to pension death benefits |
| |
within section 167(1) or lump sum death benefits within |
| 15 |
section 168(1) (or both) under both the old arrangement |
| |
and the new arrangement, and |
| |
(b) | the transfer constitutes or forms part of a transaction the |
| |
purpose of which is to secure that the activities of the |
| |
pension scheme under which the old arrangement was |
| 20 |
made are limited to retirement-benefit activities within the |
| |
meaning of section 255 of the Pensions Act 2004 or Article |
| |
232 of the Pensions (Northern Ireland) Order 2005.” |
| |
(8) | In sub-paragraph (9)— |
| |
(a) | in paragraph (a), omit “, or each of the arrangements,” and “and” at |
| 25 |
| |
(b) | in paragraph (b), after “(8)(b)” insert “or (d)” and after “15” insert “to |
| |
| |
(c) | after that paragraph insert “and |
| |
(c) | if the transfer is a permitted transfer by virtue of |
| 30 |
sub-paragraph (8)(c), this paragraph (and |
| |
paragraphs 13, 15 to 17 and 17A(3)) apply as if the |
| |
arrangement to which the transfer is made were the |
| |
same as that from which it is made and (if the |
| |
employment is transferred) as if the employment |
| 35 |
with the transferee were the employment with the |
| |
| |
(9) | After that sub-paragraph insert— |
| |
“(10) | The Treasury may by order amend sub-paragraph (8) (and make |
| |
other amendments consequential on any amendment of that sub- |
| 40 |
| |
16 | In paragraph 14 (relevant contributions), after sub-paragraph (3) insert— |
| |
“(3A) | A variation of the terms of a policy made in order to comply with |
| |
the Employment Equality (Age) Regulations 2006 or Employment |
| |
Equality (Age) Regulations (Northern Ireland) 2006 (or any |
| 45 |
regulations amending or replacing them) is to be ignored for the |
| |
purposes of sub-paragraph (3). |
| |
|
| |
|
| |
|
(3B) | Where a policy of insurance on the life of the individual issued, or |
| |
issued in respect of insurances made, before 6th April 2006 is |
| |
surrendered and a new one is taken out— |
| |
(a) | as part of a retirement-benefit activities compliance |
| |
| 5 |
(b) | as part of an age-equality compliance exercise. |
| |
| the new policy is to be treated for the purposes of sub-paragraph |
| |
(3) as if it were the same as the old. |
| |
(3C) | For the purposes of sub-paragraph (3B)(a) a policy is surrendered, |
| |
and a new policy of life insurance is taken out, as part of a |
| 10 |
retirement-benefit activities compliance exercise if— |
| |
(a) | the surrender of the old policy and the taking out of the |
| |
new policy constitute or form part of a transaction the |
| |
purpose of which is to secure that the activities of the |
| |
pension scheme under which the arrangement is made are |
| 15 |
limited to retirement-benefit activities within the meaning |
| |
of section 255 of the Pensions Act 2004 or Article 232 of the |
| |
Pensions (Northern Ireland) Order 2005, and |
| |
(b) | the rights under the old policy and the new policy are not |
| |
| 20 |
(3D) | For the purposes of sub-paragraph (3B)(b) a policy is surrendered, |
| |
and a new policy of life insurance is taken out, as part of an age- |
| |
equality compliance exercise if— |
| |
(a) | the old policy is surrendered, and the new policy is taken |
| |
out, in order to comply with the Employment Equality |
| 25 |
(Age) Regulations 2006 or Employment Equality (Age) |
| |
Regulations (Northern Ireland) 2006 (or any regulations |
| |
amending or replacing them), and |
| |
(b) | any significant difference between the rights under the old |
| |
policy and the rights under the new policy is attributable |
| 30 |
to the need to comply with those Regulations (or any |
| |
regulations amending or replacing them).” |
| |
17 (1) | Paragraph 15 (relevant benefit accrual) is amended as follows. |
| |
(2) | In sub-paragraph (2), after “arrangement” (in both places) insert “which are |
| |
| 35 |
(3) | In sub-paragraph (7), for “15 and 16” substitute “16 and 17”. |
| |
Inheritance tax: lump sum death benefits |
| |
18 | In section 58 of IHTA 1984 (settlements: “relevant property”), after |
| |
| |
“(2A) | For the purposes of subsection (1)(d) above— |
| 40 |
(a) | property applied to pay lump sum death benefits within |
| |
section 168(1) of the Finance Act 2004 in respect of a member |
| |
of a registered pension scheme is to be taken to be held for the |
| |
purposes of the scheme from the time of the member’s death |
| |
until the payment is made, and |
| 45 |
(b) | property applied to pay lump sum death benefits in respect |
| |
of a member of a section 615(3) scheme is to be taken to be so |
| |
held if the benefits are paid within the period of two years |
| |
|
| |
|