|
| |
|
the member on death were to the time when tax is charged |
| |
| |
(4) | Subsection (5) below applies where, before the time when the |
| |
dependant dies or ceases to be a relevant dependant, there have been |
| |
one or more reductions of tax by virtue of the coming into force of a |
| 5 |
substitution of a new Table in Schedule 1 to this Act since the |
| |
| |
(5) | The rate or rates at which tax is charged under section 151B above is |
| |
to be determined as if the new Table effecting the reduction of tax (or |
| |
the most recent reduction of tax) had been in force at the time of the |
| 10 |
| |
23 (1) | Section 151C (dependant dying with other pension fund) is amended as |
| |
| |
(2) | For subsection (2) substitute— |
| |
“(2) | Tax shall be charged on the relevant amount as if it were part of the |
| 15 |
value transferred by the transfer of value made on the dependant’s |
| |
death at the rate or rates at which it would be charged if it formed the |
| |
highest part of that value.” |
| |
(3) | In subsection (3)(a), after “death” insert “but reduced by the amount of any |
| |
previously charged income tax”. |
| 20 |
(4) | After that subsection insert— |
| |
“(3A) | In subsection (3)(a) above “the amount of any previously charged |
| |
income tax” means the amount of any liability to income tax which |
| |
(after the dependant’s death but before the time when tax is charged |
| |
on the transfer of value treated as made by the dependant on death) |
| 25 |
has arisen by virtue of the making of an unauthorised member |
| |
payment under Part 4 of the Finance Act 2004 relating to the |
| |
dependant’s alternatively secured pension fund. |
| |
(3B) | Subsection (3C) below applies where the maximum that could be |
| |
transferred by the chargeable transfer made (under section 4 above) |
| 30 |
on death if it were to be wholly chargeable to tax at the rate of nil per |
| |
| |
(a) | the value actually transferred by that chargeable transfer, less |
| |
(b) | any previously untaxed dependant’s alternatively secured |
| |
| 35 |
(3C) | Where this subsection applies, tax is to be charged on the previously |
| |
untaxed dependant’s alternatively secured pension fund amount as |
| |
if the nil rate band maximum were—![equation: over[cross[times[char[U],char[N],char[R],char[B]],num[100.0000000000000000,"100"]],
plus[num[100.0000000000000000,"100"],minus[times[char[M],char[U],char[P],char[R]]]]]](missing.gif) |
| |
| |
UNRB is the unused nil rate band, that is the excess mentioned |
| 40 |
in subsection (3B) above; and |
| |
MUPR is the maximum unauthorised payment rate, that is the |
| |
maximum aggregate rate at which tax is chargeable under |
| |
Part 4 of the Finance Act 2004 in respect of an unauthorised |
| |
| 45 |
|
| |
|
| |
|
(3D) | The relevant amount is to be reduced by the aggregate of so much of |
| |
the sums and the value of the assets of the dependant’s alternatively |
| |
secured pension fund as arises, or (directly or indirectly) derives, |
| |
from sums or assets forming part of an alternatively secured pension |
| |
fund of the member which were designated as available for the |
| 5 |
| |
(a) | dependants’ unsecured pension, or |
| |
(b) | dependants’ alternatively secured pension, |
| |
| to the dependant under the arrangement.” |
| |
(5) | In subsection (4), omit “and” at the end of the definition of “dependant” and |
| 10 |
| |
““previously untaxed dependant’s alternatively secured |
| |
pension fund amount” means so much of the aggregate |
| |
mentioned in subsection (3)(a) above as has not given rise to |
| |
any liability to tax by virtue of Part 4 of the Finance Act 2004 |
| 15 |
before tax is charged on the transfer treated as made by the |
| |
| |
24 | In section 216(6)(ac) (delivery of account)— |
| |
(a) | after “occurs” insert “, the scheme administrator becomes aware of |
| |
| 20 |
(b) | insert at the end “(depending on which occasions the charge)”. |
| |
25 | In section 226(4) (payment), after “Act” insert “, or under section 151A above |
| |
by virtue of subsection (6) of that section,”. |
| |
26 | In section 233(1)(c) (interest on unpaid tax), after “Act” insert “, or under |
| |
section 151A above by virtue of subsection (6) of that section,”. |
| 25 |
27 | In Schedule 2 (provisions applying on reduction of tax), omit paragraph 6A. |
| |
| |
28 (1) | Section 636A of ITEPA 2003 (exemption for certain lump sums under |
| |
registered pension schemes) is amended as follows. |
| |
| 30 |
(a) | insert “or” at the end of paragraph (d), and |
| |
(b) | omit paragraph (f) and the word “or” before it. |
| |
(3) | In subsection (7), omit ““transfer lump sum death benefit”,”. |
| |
| |
29 (1) | The amendments made by paragraphs 2(2) and 3 have effect in relation to |
| 35 |
deaths of members of registered pension schemes occurring on or after 6th |
| |
| |
(2) | The amendments made by paragraphs 2(3), 4, 14 and 15 have effect for |
| |
alternatively secured pension years beginning on or after 6th April 2007. |
| |
(3) | The amendments made by paragraphs 5 to 10, 18(2) and (3) and 28 have |
| 40 |
effect in relation to lump sum death benefits paid in respect of members of |
| |
schemes whose deaths occur on or after 6th April 2007. |
| |
|
| |
|
| |
|
(4) | The amendments made by paragraphs 11, 12(5) and 16(2), (4) and (6) are |
| |
deemed to have come into force on 6th April 2006. |
| |
(5) | The amendments made by paragraphs 12(2) and 13 have effect in relation to |
| |
members of registered pension schemes becoming entitled to alternatively |
| |
secured rights on or after 6th April 2007 in respect of members whose deaths |
| 5 |
occur on or after that date. |
| |
(6) | The amendments made by paragraph 16(3) and (5) have effect in relation to |
| |
charity lump sum death benefits paid on or after 6th April 2007. |
| |
(7) | The amendment made by paragraph 17 is deemed to have come into force |
| |
| 10 |
(8) | The amendments made by paragraphs 19 to 27 have effect in relation to |
| |
deaths, cases where scheme administrators become aware of deaths and |
| |
cessations of dependency occurring on or after 6th April 2007. |
| |
| |
| |
Pension schemes etc: miscellaneous |
| 15 |
| |
1 | Part 4 of FA 2004 (pension schemes etc) is amended as follows. |
| |
Persons by whom registered pension schemes may be established |
| |
2 (1) | Section 154 (persons by whom registered pension scheme may be |
| |
established) is amended as follows. |
| 20 |
(2) | For subsection (1) substitute— |
| |
“(1) | An application to register a pension scheme may be made only if the |
| |
| |
(a) | is an occupational pension scheme, or |
| |
(b) | has been established by a person with permission under |
| 25 |
FISMA 2000 to establish in the United Kingdom a personal |
| |
pension scheme or a stakeholder pension scheme.” |
| |
(3) | After subsection (2) insert— |
| |
“(2A) | Subsection (1) is to be construed in accordance with section 22 of |
| |
FISMA 2000, any relevant order under that section and Schedule 2 to |
| 30 |
| |
| |
(5) | In subsection (4), omit “and section 155”. |
| |
3 | Omit section 155 (persons by whom scheme may be established: |
| |
| 35 |
4 | In section 273 (members liable as scheme administrator)— |
| |
(a) | in subsection (5)(a), omit “was established by a person or body |
| |
specified in section 154(1)(a) to (g) (insurance companies etc) and”, |
| |
| |
|
| |
|
| |
|
(b) | in subsection (7), omit “was established by a person or body specified |
| |
in section 154(1)(a) to (g) and”. |
| |
Unauthorised payments reduced by amount of scheme sanction charge |
| |
5 | In section 160 (unauthorised payments), after subsection (4) insert— |
| |
“(4A) | If an unauthorised member payment or unauthorised employer |
| 5 |
payment made to or in respect of a person would have been greater |
| |
but for a reduction made in respect of the whole, or any proportion, |
| |
of the amount which the scheme administrator considers may be the |
| |
amount of the liability to the scheme sanction charge in respect of it, |
| |
it is to be regarded for the purposes of this Part as increased by the |
| 10 |
| |
(4B) | But if the amount, or that proportion of the amount, of that liability |
| |
is in fact less than the amount of the reduction, a subsequent |
| |
payment of an amount not exceeding the difference between that |
| |
amount and the amount of the reduction made— |
| 15 |
(a) | to or in respect of the same person, and |
| |
(b) | before the end of the period of two years beginning with the |
| |
date on which the unauthorised member payment or |
| |
unauthorised employer payment was made, |
| |
| is not to be regarded for the purposes of this Part as an unauthorised |
| 20 |
member payment or unauthorised employer payment.” |
| |
| |
6 (1) | Section 172A (surrender) is amended as follows. |
| |
(2) | In subsection (5), after paragraph (d) insert— |
| |
“(da) | a surrender made as part of a retirement-benefit activities |
| 25 |
| |
(db) | a surrender of a prospective entitlement to pension death |
| |
benefits within section 167(1) or lump sum death benefits |
| |
within section 168(1) (or both) made in order to comply with |
| |
the Employment Equality (Age) Regulations 2006 or |
| 30 |
Employment Equality (Age) Regulations (Northern Ireland) |
| |
2006 (or any regulations amending or replacing them),”. |
| |
(3) | In subsection (10), for “An” substitute “For the purposes of this section an”. |
| |
(4) | After that subsection insert— |
| |
“(10A) | For the purposes of this section a surrender relating to an |
| 35 |
arrangement under the pension scheme (“the old arrangement”) is |
| |
made as part of a retirement-benefit activities compliance exercise |
| |
| |
(a) | it is made in connection with the making of an arrangement |
| |
under another pension scheme relating to the member (“the |
| 40 |
| |
(b) | the old arrangement and the new arrangement relate to the |
| |
| |
(c) | both the rights surrendered and the rights conferred under |
| |
the new arrangement consist of or include a prospective |
| 45 |
|
| |
|
| |
|
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 |
| |
constitute or form part of a transaction the purpose of which |
| |
is to secure that the activities of the pension scheme are |
| 5 |
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 |
| |
(e) | the rights surrendered and the rights conferred under the |
| |
new arrangement are not significantly different.” |
| 10 |
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 |
| |
pension is permitted), for paragraph (a) substitute— |
| |
“(a) | the reduction of the pension if the member became entitled |
| 15 |
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 |
| |
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 |
| 20 |
2, or the rate of which is reduced in accordance with paragraph (b) of that |
| |
| |
Unsecured and dependants’ unsecured pensions: reference periods |
| |
8 (1) | Schedule 28 (pension rules) is amended as follows. |
| |
(2) | In paragraph 10 (reference periods for unsecured pensions), for sub- |
| 25 |
paragraph (1) substitute— |
| |
“(1) | Subject as follows, the period of five unsecured pension years |
| |
beginning with the first unsecured pension year, and each |
| |
succeeding period of five unsecured pension years, is a “reference |
| |
| 30 |
(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 |
| |
period to begin on the next day that is an anniversary of the |
| |
reference date in relation to the current reference period. |
| 35 |
(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 |
| |
| |
(b) | that (subject to any further operation of this sub- |
| 40 |
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. |
| |
(1C) | The first day of each reference period is, in relation to that period, |
| |
| 45 |
|
| |
|
| |
|
(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 |
| |
beginning with the first unsecured pension year, and each |
| |
succeeding period of five unsecured pension years, is a “reference |
| 5 |
| |
(1A) | Sub-paragraph (1B) applies if, at any time during a reference |
| |
period (“the current reference period”), the dependant notifies the |
| |
scheme administrator that the dependant wishes a new reference |
| |
period to begin on the next day that is an anniversary of the |
| 10 |
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 |
| |
| 15 |
(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. |
| |
(1C) | The first day of each reference period is, in relation to that period, |
| 20 |
| |
Pension commencement lump sums |
| |
9 | In section 166(2)(a) (when person becomes entitled to pension |
| |
commencement lump sum), after “paid” insert “(or, if the person dies before |
| |
becoming entitled to the pension in connection with which it was |
| 25 |
anticipated it would be paid, immediately before death)”. |
| |
10 | In section 219(7) (multiple benefit crystallisation events occuring by reason |
| |
of payment of lump sum death benefits treated as occurring immediately |
| |
before death), insert at the end “but immediately after any benefit |
| |
crystallisation event occurring immediately before the individual’s death by |
| 30 |
virtue of section 166(2).” |
| |
11 (1) | Schedule 29 (authorised lump sums) is amended as follows. |
| |
(2) | In paragraph 1(1) (conditions to be met if lump sum is to be pension |
| |
| |
(a) | for paragraph (a) substitute— |
| 35 |
“(a) | the member becomes entitled to it before reaching |
| |
| |
(aa) | the member becomes entitled to it in connection |
| |
with becoming entitled to a relevant pension (or |
| |
dies after becoming entitled to it but before |
| 40 |
becoming entitled to the relevant pension in |
| |
connection with which it was anticipated that the |
| |
member would become entitled to it)”, |
| |
(b) | in paragraph (c), for “of three months beginning with” substitute |
| |
“beginning six months before, and ending one year after,”, and |
| 45 |
(c) | omit paragraph (e) (but not including the “and” at the end). |
| |
|
| |
|
| |
|
(3) | In paragraph 2 (“permitted maximum”), after sub-paragraph (5) insert— |
| |
“(5A) | But if the member dies before becoming entitled to the relevant |
| |
pension in connection with which it was anticipated that the |
| |
member would become entitled to the lump sum, the permitted |
| |
maximum is the available portion of the member’s lump sum |
| 5 |
| |
| |
12 (1) | Paragraph 10 of Schedule 29 (winding-up lump sums) is amended as |
| |
| |
(2) | In sub-paragraph (1)(c), for “the member’s employer” substitute “any |
| 10 |
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 |
| |
| |
(3) | In sub-paragraph (3)— |
| 15 |
(a) | for “are that the employer” substitute “referred to in paragraph (c) of |
| |
sub-paragraph (1) are that the person mentioned in that paragraph”, |
| |
| |
| |
| 20 |
13 (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 |
| 25 |
| |
(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 |
| 30 |
| |
Taxable property held by investment-regulated pension schemes: indirect holdings in REITs |
| |
14 (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 |
| 35 |
REITs), for “paragraph 22 makes” substitute “paragraphs 22, 24 and 25 |
| |
| |
(3) | In paragraph 22 (REITs)— |
| |
(a) | in sub-paragraph (1), after paragraph (b) insert— |
| |
| “and paragraph 24 applies to the pension scheme’s interest |
| 40 |
| |
(b) | omit sub-paragraph (2). |
| |
|
| |
|