|
| |
|
the words “if that provision does not increase any person’s liability to tax” |
| |
| |
Application of rules of pension schemes |
| |
109 (1) | The trustees or managers of a registered pension scheme may make any |
| |
payment under the scheme which, by virtue of the amendments made by |
| 5 |
this Schedule, is an authorised member payment (within the meaning of |
| |
section 164 of FA 2004), despite any provision of the rules of the pension |
| |
scheme (however framed) prohibiting the making of such a payment. |
| |
(2) | In the case of a personal pension scheme within the meaning of section 1 of |
| |
the Pension Schemes Act 1993, nothing in subsection (1) of section 28 of that |
| 10 |
Act (ways of giving effect to protected rights) is to be taken to prevent the |
| |
trustees or managers of the scheme from giving effect to the protected rights |
| |
of a member of the scheme in the way provided for by subsection (1A) of that |
| |
| |
(3) | In the case of a personal pension scheme within the meaning of section 1 of |
| 15 |
the Pension Schemes (Northern Ireland) Act 1993, nothing in subsection (1) |
| |
of section 24 of that Act (ways of giving effect to protected rights) is to be |
| |
taken to prevent the trustees or managers of the scheme from giving effect |
| |
to the protected rights of a member of the scheme in the way provided for |
| |
by subsection (1A) of that section. |
| 20 |
| |
| |
| |
| |
| |
1 | Part 4 of FA 2004 (pension schemes etc) is amended as follows. |
| 25 |
2 | In section 172D(4)(b) (limit on increase in benefits), for “236” substitute |
| |
| |
3 (1) | Section 227 (annual allowance charge) is amended as follows. |
| |
(2) | Omit subsections (2) and (3). |
| |
(3) | In subsection (4), for “rate of 40%” substitute “appropriate rate”. |
| 30 |
(4) | After that subsection insert— |
| |
“(4A) | The appropriate rate is— |
| |
(a) | the basic rate in relation to so much (if any) of the excess as, |
| |
when added to the individual’s reduced net income for the |
| |
tax year, does not exceed the basic rate limit for the tax year, |
| 35 |
(b) | the higher rate in relation to so much (if any) of the excess as, |
| |
when so added, exceeds the basic rate limit for the tax year |
| |
but does not exceed the higher rate limit for the tax year, and |
| |
|
| |
|
| |
|
(c) | the additional rate in relation to so much (if any) of the excess |
| |
as, when so added, exceeds the higher rate limit for the tax |
| |
| |
(4B) | The individual’s reduced net income for the tax year is the amount |
| |
after taking Step 3 in section 23 of ITA 2007 in the case of the |
| 5 |
individual for the tax year. |
| |
(4C) | Where the basic rate limit or the higher rate limit for the tax year is |
| |
(in accordance with section 192 of this Act or section 414 of ITA 2007) |
| |
increased in the case of the individual, the references to the limit in |
| |
subsection (4A) are to the limit as so increased.” |
| 10 |
(5) | Omit subsections (5A) and (5B). |
| |
(6) | In subsection (6), after the entry relating to sections 230 to 237 (before the |
| |
| |
“sections 237A to 237F (persons liable to charge),”. |
| |
4 | For section 228 substitute— |
| 15 |
| |
(1) | The annual allowance for the tax year 2011-12 and, subject to |
| |
subsection (2), each subsequent tax year is £50,000. |
| |
(2) | The Treasury may by order provide that the annual allowance for |
| |
any tax year subsequent to the tax year 2011-12 is such amount as is |
| 20 |
| |
5 | After that section insert— |
| |
“228A | Carry forward of unused annual allowance |
| |
(1) | This section applies if the individual has unused annual allowance |
| |
available for the tax year (“the current tax year”). |
| 25 |
(2) | The annual allowance for the current tax year in the case of the |
| |
individual is to be treated as increased by the amount of the unused |
| |
annual allowance available for the current tax year. |
| |
(3) | The individual has unused annual allowance available for the |
| |
| 30 |
(a) | the amount of the annual allowance (before any increase |
| |
under this section) for the immediately preceding tax year |
| |
exceeded the total pension input amount in the case of the |
| |
individual for that tax year, or |
| |
(b) | the amount of the annual allowance (before any such |
| 35 |
increase) for either or both of the two tax years immediately |
| |
preceding that immediately preceding tax year exceeded the |
| |
total pension input amount in the case of the individual for |
| |
the tax year concerned and the excess (or, where there is an |
| |
excess for both of those tax years, the excess for both tax |
| 40 |
years) has not been used up, |
| |
| |
| |
|
| |
|
| |
|
(a) | does not apply in relation to a tax year preceding the current |
| |
tax year unless the individual was a member of a registered |
| |
pension scheme at some time during that tax year, but |
| |
(b) | subject to that, applies in relation to such a tax year even if the |
| |
total pension input amount in the case of the individual for |
| 5 |
that tax year was nil (in which case the excess within |
| |
paragraph (a) or (b) of that subsection is the whole amount of |
| |
the annual allowance before any increase under this section). |
| |
(5) | The amount of the unused annual allowance available for the current |
| |
tax year is the aggregate of— |
| 10 |
(a) | any excess within subsection (3)(a), and |
| |
(b) | so much of any excess within subsection (3)(b) as has not |
| |
| |
(6) | An amount of an excess within subsection (3)(b) for a tax year has |
| |
| 15 |
(a) | for a tax year falling between that tax year and the current tax |
| |
year (an “intervening tax year”), the total pension input |
| |
amount in the case of the individual exceeded the annual |
| |
allowance (apart from any increase under this section), and |
| |
(b) | the amount of the excess had effect by virtue of this section to |
| 20 |
reduce (or eliminate) the annual allowance charge for the |
| |
intervening tax year in the case of the individual. |
| |
(7) | In calculating for the purposes of subsection (6) the amount of which |
| |
of the excesses for different tax years had effect to reduce or eliminate |
| |
the annual allowance charge for an intervening tax year, an amount |
| 25 |
of the excess for an earlier tax year is to be taken to have done so |
| |
before that for a later tax year.” |
| |
6 (1) | Section 229 (total pension input amount) is amended as follows. |
| |
(2) | In subsection (2)(c), for “236” substitute “236A”. |
| |
(3) | in subsection (3), for paragraph (a) substitute— |
| 30 |
“(a) | satisfies the severe ill-health condition, or”. |
| |
(4) | After that subsection insert— |
| |
“(4) | For the purposes of subsection (3)(a) the individual satisfies the |
| |
severe ill-health condition if the individual— |
| |
(a) | becomes entitled to all the benefits to which the individual is |
| 35 |
entitled under the arrangement in consequence of the scheme |
| |
administrator having received evidence from a registered |
| |
medical practitioner that the individual is suffering from ill- |
| |
health which makes the individual unlikely to be able |
| |
(otherwise than to an insignificant extent) to undertake |
| 40 |
gainful work (in any capacity) before reaching pensionable |
| |
| |
(b) | becomes entitled to a serious ill-health lump sum under the |
| |
| |
(c) | is a member of the armed forces of the Crown who becomes |
| 45 |
entitled under the arrangement to a benefit on which no |
| |
liability to income tax arises by virtue of section 641(1) of |
| |
| |
|
| |
|
| |
|
7 (1) | Section 230 (cash balance arrangements) is amended as follows. |
| |
(2) | In subsection (4), for “beginning of the pension input period” substitute “end |
| |
of the immediately preceding pension input period (or is nil if the pension |
| |
input period is the first pension input period of the arrangement)”. |
| |
(3) | After subsection (5) insert— |
| 5 |
“(5A) | If, during the pension input period, minimum payments are made |
| |
| |
(a) | section 8 of the Pension Schemes Act 1993, or |
| |
(b) | section 4 of the Pension Schemes (Northern Ireland) Act 1993, |
| |
| in relation to the individual in connection with the arrangement, |
| 10 |
their amount is to be subtracted from what would otherwise be the |
| |
pension input amount in the case of the individual in respect of the |
| |
| |
(5B) | The pension input amount in respect of the arrangement is nil if— |
| |
(a) | the individual is a deferred member of the pension scheme |
| 15 |
under which it is an arrangement (or would be if it were the |
| |
only arrangement under the pension scheme relating to the |
| |
individual) throughout the pension input period or is (or |
| |
would be) such a deferred member for part of the pension |
| |
input period and a pensioner member for the rest of it, and |
| 20 |
(b) | the value of the relevant rights of the individual does not |
| |
increase during the pension input period by more than the |
| |
| |
| |
“guaranteed minimum pension” has the meaning given by— |
| 25 |
(a) | section 8(2) of the Pension Schemes Act 1993, or |
| |
(b) | section 4(2) of the Pension Schemes (Northern |
| |
| |
“predecessor arrangement”, in relation to an arrangement, |
| |
means another arrangement (under the same or another |
| 30 |
registered pension scheme) from which some or all of the |
| |
sums or assets held for the purposes of the arrangement |
| |
directly or indirectly derive; |
| |
“predecessor registered pension scheme”, in relation to a |
| |
pension scheme, means another registered pension scheme |
| 35 |
from which some or all of the sums or assets held for the |
| |
purposes of the arrangement under the pension scheme |
| |
directly or indirectly derive; |
| |
“the relevant percentage”— |
| |
(a) | where throughout the pension input period the |
| 40 |
arrangement (or a predecessor arrangement) includes |
| |
provision for the value of the relevant rights of the |
| |
individual to increase at an annual rate specified in |
| |
the rules of the pension scheme (or a predecessor |
| |
registered pension scheme) on 14 October 2010, that |
| 45 |
| |
(b) | otherwise, the percentage by which the consumer |
| |
prices index for a month falling within the pension |
| |
input period and nominated by the scheme |
| |
administrator is higher than it was for the same |
| 50 |
|
| |
|
| |
|
month in the previous period of 12 months (or nil per |
| |
cent if it is not higher); |
| |
“the relevant rights of the individual” means rights of the |
| |
individual under the arrangement, other than any rights to a |
| |
guaranteed minimum pension; |
| 5 |
“specified”, in relation to an annual rate, means specified as a |
| |
percentage figure or as a percentage produced by movement |
| |
in an index (or a combination of the two) but does not include |
| |
a percentage produced by the exercise of a discretion by any |
| |
| 10 |
8 | In section 231 (cash balance arrangements: uprating of opening value), for |
| |
subsection (3) substitute— |
| |
“(3) | The appropriate percentage is the percentage (if any) by which the |
| |
consumer prices index for the September before the start of the tax |
| |
year is higher than it was for the previous September.” |
| 15 |
9 (1) | Section 232 (cash balance arrangements: adjustments of closing value) is |
| |
| |
(2) | In subsection (2), for “the debit” substitute “the reduction”. |
| |
(3) | In subsection (3), for “the credit” substitute “the increase”. |
| |
| 20 |
(a) | for “Subsection (5) applies if” substitute “If”, |
| |
(b) | for “virtue of a transfer of any sum or asset” substitute “reason of a |
| |
transfer relating to the individual of any sums or assets”, |
| |
| |
(d) | insert at the end (not as part of paragraph (b)) “the amount of the |
| 25 |
reduction is to be added.” |
| |
| |
| |
(a) | for “Subsection (7) applies if” substitute “If”, |
| |
(b) | for “virtue of a transfer” substitute “reason of a transfer relating to |
| 30 |
| |
(c) | insert at the end “, the amount of the increase is to be subtracted.” |
| |
| |
(8) | For subsection (8) substitute— |
| |
“(8) | If, during the pension input period, the rights of the individual under |
| 35 |
the arrangement have been reduced by any surrender made, or |
| |
similar action taken, pursuant to an option available to the |
| |
individual under the arrangement, the amount of the reduction is to |
| |
| |
(8A) | If, during the pension input period— |
| 40 |
(a) | benefit crystallisation event 1, 2 or 4 occurs in relation to the |
| |
individual and the arrangement, |
| |
(b) | benefit crystallisation event 3 occurs in relation to the |
| |
individual and the arrangement otherwise than by reason of |
| |
a provision contained in, or made under, any enactment, |
| 45 |
|
| |
|
| |
|
(c) | benefit crystallisation event 6 occurs or, but for paragraph |
| |
15A of Schedule 32, would occur in relation to the individual |
| |
and the arrangement by virtue of the individual becoming |
| |
entitled to a pension commencement lump sum or a lifetime |
| |
allowance excess lump sum, or |
| 5 |
(d) | there is an allocation of rights of the individual under the |
| |
arrangement (not falling within paragraph (a)), |
| |
| the relevant amount is to be added. |
| |
(8B) | In subsection (8A) “the relevant amount” is— |
| |
(a) | in the case of benefit crystallisation event 2, what the annual |
| 10 |
rate of the pension would be on the valuation assumptions, |
| |
(b) | in the case of benefit crystallisation event 3, the increase in the |
| |
annual rate of the pension, |
| |
(c) | in the case of benefit crystallisation event 6, the amount of the |
| |
| 15 |
(d) | in any other case, the amount of the reduction in the amount |
| |
of the rights available for the provision of benefits to or in |
| |
respect of the individual occurring by reason of the benefit |
| |
crystallisation event or allocation. |
| |
(8C) | If, during the pension input period, an adjustment to the individual’s |
| 20 |
rights under the arrangement is made in consequence of the scheme |
| |
administrator satisfying a liability under section 237B in respect of |
| |
the individual, if and to the extent that the adjustment would not |
| |
otherwise be reflected in the closing amount the appropriate amount |
| |
| 25 |
| |
10 (1) | Section 234 (defined benefits arrangements) is amended as follows. |
| |
| |
(a) | for “10” substitute “16”, |
| |
(b) | in the definition of PB, for “beginning of the pension input period” |
| 30 |
substitute “end of the immediately preceding pension input period |
| |
(or is nil if the pension input period is the first pension input period |
| |
of the arrangement)”, and |
| |
(c) | in the definition of LSB, for “that time” substitute “the end of the |
| |
immediately preceding pension input period (or is nil if the pension |
| 35 |
input period is the first pension input period of the arrangement)”. |
| |
(3) | In subsection (5), for “10” substitute “16”. |
| |
(4) | After that subsection insert— |
| |
“(5A) | If, during the pension input period, minimum payments are made |
| |
| 40 |
(a) | section 8 of the Pension Schemes Act 1993, or |
| |
(b) | section 4 of the Pension Schemes (Northern Ireland) Act 1993, |
| |
| in relation to the individual in connection with the arrangement, |
| |
their amount is to be subtracted from what would otherwise be the |
| |
pension input amount in the case of the individual in respect of the |
| 45 |
| |
(5B) | The pension input amount in respect of the arrangement is nil if— |
| |
|
| |
|
| |
|
(a) | the individual is a deferred member of the pension scheme |
| |
under which it is an arrangement (or would be if it were the |
| |
only arrangement under the pension scheme relating to the |
| |
individual) throughout the pension input period or is (or |
| |
would be) such a deferred member for part of the pension |
| 5 |
input period and a pensioner member for the rest of it, and |
| |
(b) | the value of the relevant rights of the individual does not |
| |
increase during the pension input period by more than the |
| |
| |
| 10 |
“guaranteed minimum pension” has the meaning given by— |
| |
(a) | section 8(2) of the Pension Schemes Act 1993, or |
| |
(b) | section 4(2) of the Pension Schemes (Northern |
| |
| |
“predecessor arrangement”, in relation to an arrangement, |
| 15 |
means another arrangement (under the same or another |
| |
registered pension scheme) from which some or all of the |
| |
sums or assets held for the purposes of the arrangement |
| |
directly or indirectly derive; |
| |
“predecessor registered pension scheme”, in relation to a |
| 20 |
pension scheme, means another registered pension scheme |
| |
from which some or all of the sums or assets held for the |
| |
purposes of the arrangement under the pension scheme |
| |
directly or indirectly derive; |
| |
“the relevant percentage”— |
| 25 |
(a) | where throughout the pension input period the |
| |
arrangement (or a predecessor arrangement) includes |
| |
provision for the value of the relevant rights of the |
| |
individual to increase at an annual rate specified in |
| |
the rules of the pension scheme (or a predecessor |
| 30 |
registered pension scheme) on 14 October 2010, that |
| |
| |
(b) | otherwise, the percentage by which the consumer |
| |
prices index for a month falling within the pension |
| |
input period and nominated by the scheme |
| 35 |
administrator is higher than it was for the same |
| |
month in the previous period of 12 months (or nil per |
| |
cent if it is not higher); |
| |
“the relevant rights of the individual” means rights of the |
| |
individual under the arrangement, other than any rights to a |
| 40 |
guaranteed minimum pension; |
| |
“specified”, in relation to an annual rate, means specified as a |
| |
percentage figure or as a percentage produced by movement |
| |
in an index (or a combination of the two) but does not include |
| |
a percentage produced by the exercise of a discretion by any |
| 45 |
| |
(5) | In subsection (6), for “and section 236 (adjustments of closing value)” |
| |
substitute “, section 236 (adjustments of closing value) and section 236A |
| |
(post-entitlement enhancements)”. |
| |
11 (1) | In section 235 (defined benefits arrangements: uprating of opening value) is |
| 50 |
| |
|
| |
|