Power to split schemes
(1) The Board of Inland Revenue may make regulations for and in connection with treating registered pension schemes to which this section applies as if they were a number of separate registered pension schemes for such of the purposes of this Part and of provision made under it as are prescribed by the regulations.
(2) This section applies to pension schemes prescribed, or of a description prescribed, by the regulations.
(3) The provision that may be made by the regulations may, in particular, include—
(a) provision as to who is to be treated as the scheme administrator in relation to each of the separate pension schemes, and
(b) any such other modifications of the provision made by and under this Part as appears appropriate in consequence of, or otherwise in connection with, provision made under subsection (1) (including provision so made by virtue of paragraph (a) of this subsection).
(4) The regulations may make different provision for different cases.
National Employment Savings Trust and Master Trust schemes
National Employment Savings Trust and Master Trust schemes
(1) This Part applies in relation to a pension scheme that—
(a) is established under section 67 of the Pensions Act 2008, and
(b) is not an occupational pension scheme,
as it applies in relation to an occupational pension scheme.
(2) This Part applies in relation to a pension scheme that—
(a) is a Master Trust scheme, and
(b) is not an occupational pension scheme,
as it applies in relation to an occupational pension scheme.
Treatment of pension benefits reclaimed from reclaim fund etc
(1) Subsection (2) applies where an amount is paid out of an authorised reclaim fund in respect of transferred dormant eligible pension benefits.
(2) For the purposes of income tax and this Part, the amount paid out is to be treated as having been paid as a consequence of a right that is the same as the original rights, acquired as the original rights were acquired and having the same characteristics as those rights.
(3) The Commissioners for His Majesty’s Revenue and Customs may make regulations in relation to cases where—
(a) an amount is paid out of an authorised reclaim fund in respect of transferred dormant eligible pension benefits,
(b) the registered pension scheme from which the benefits were transferred was wound up before the payment of that amount, and
(c) the payment, or part of the payment, is treated (by virtue of subsection (2)) as being the payment by a registered pension scheme of—
(i) a pension protection lump sum death benefit,
(ii) an annuity protection lump sum death benefit,
(iii) a drawdown pension fund lump sum death benefit, or
(iv) a flexi-access drawdown fund lump sum death benefit.
(4) Regulations under subsection (3) may provide that a person specified in the regulations—
(a) is to be treated as the scheme administrator for the purposes of the operation of section 206;
(b) is responsible for the discharge of all obligations imposed on the scheme administrator by or under this Part so far as related to the liability imposed by that section to pay tax in respect of it.
(5) Regulations under subsection (3) may—
(a) make specific or general provision;
(b) make different provision for different cases.
(6) No liability to income tax arises in respect of income derived from investments or deposits—
(a) that are held by an authorised reclaim fund, and
(b) that relate to an amount transferred to the authorised reclaim fund in respect of transferred dormant eligible pension benefits.
(7) For the purposes of subsection (6), it does not matter when liability to income tax on income within that subsection would otherwise arise.
(8) Subsection (2) of section 186 (income) applies for the purposes of subsection (6) of this section as it applies for the purposes of subsection (1) of that section.
(9) For the purposes of this section—
“ authorised reclaim fund ” has the same meaning as in the Dormant Assets Acts 2008 to 2022;
“ the original rights ” are a person’s rights against the scheme administrator of a registered pension scheme, in respect of the benefits subsequently transferred by the scheme administrator to an authorised reclaim fund, immediately before the transfer;
“ transferred dormant eligible pension benefits ” means dormant eligible pensions benefits owing to a person that have been transferred by the scheme administrator of a registered pension scheme to an authorised reclaim fund with the result that section 5 of the Dormant Assets Act 2022 (transfer of eligible pension benefits to reclaim fund) applies (and references to benefits being transferred are to be construed accordingly).
Insurance company
(1) In this Part “ insurance company ” means—
(a) a person who has permission under Part 4 of FISMA 2000 to effect or carry out contracts of long-term insurance, ...
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) “ Contracts of long-term insurance ” means contracts which fall within Part 2 of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544).
Relevant valuation factor
(1) For the purposes of this Part the relevant valuation factor in relation to any registered pension scheme, or any arrangement under a registered pension scheme, is 20.
(2) But the Inland Revenue and the scheme administrator of any registered pension scheme may agree that the relevant valuation factor in relation to the pension scheme, or any arrangement under the pension scheme, is to be a number greater than 20.
Valuation assumptions
For the purposes of this Part the valuation assumptions in relation to a person, benefits and a date are—
(a) if the person has not reached such age (if any) as must have been reached to avoid any reduction in the benefits on account of age, that the person reached that age on the date, and
(b) that the person’s right to receive the benefits had not been occasioned by physical or mental impairment.
Market value
(1) For the purposes of this Part the market value of an asset held for the purposes of a pension scheme is to be determined in accordance with section 272 of TCGA 1992.
(2) Where an asset held for the purposes of a pension scheme is a right or interest in respect of any money lent (directly or indirectly) to any relevant associated person, the value of the asset is to be treated as being the amount owing (including any unpaid interest) on the money lent.
(3) The following are “ relevant associated persons ”—
(a) any employer who has at any time (whether or not before the making of the loan) made contributions under the pension scheme,
(b) any company connected (at the time of the making of the loan or subsequently) with any such employer,
(c) any person who has at any time (whether or not before the making of the loan) been a member of the pension scheme, and
(d) any person connected (at the time of the making of the loan or subsequently) with any such person.
(3A) For the purposes of this Part the market value of taxable property, or of an interest in taxable property, is to be determined in accordance with section 272 of TCGA 1992.
(3B) Subsection (3A) is subject to any provision made by regulations under paragraph 36(2) of Schedule 29A.
(4) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.
Disqualifying pension credits
(1) For the purposes of this Part, a pension credit is “disqualifying” if, when the member becomes entitled to it, the person subject to the corresponding pension debit has an actual (rather than a prospective) right to payment of a pension under the relevant arrangement.
(2) The “relevant arrangement” is the arrangement to which the pension sharing order, or provision by virtue of which the member becomes entitled to the pension credit, relates.
Annuities and scheme pensions: meaning of “related to”
(1) For the purposes of this Part, a dependants' annuity is “related to” a lifetime annuity payable to a member of a registered pension scheme if—
(a) they are purchased either in the form of a joint life annuity or separately in circumstances in which the day on which the one is purchased is no earlier than seven days before, and no later than seven days after, the day on which the other is purchased, and
(b) the dependants’ annuity will be payable to a dependant of the member.
(2) For the purposes of this Part, a nominees’ annuity is “related to” a lifetime annuity payable to a member of a registered pension scheme if—
(a) they are purchased either in the form of a joint life annuity or separately in circumstances in which the day on which the one is purchased is no earlier than seven days before, and no later than seven days after, the day on which the other is purchased, and
(b) the nominees’ annuity will be payable to a nominee of the member.
(3) For the purposes of this Part, a dependants’ scheme pension is “related to” a scheme pension payable to a member of a registered pension scheme if—
(a) the day on which one is purchased or sums or assets are applied for its provision is no earlier than seven days before, and no later than seven days after, the day on which the other is purchased or sums or assets are applied for its provision, and
(b) the dependants’ scheme pension will be payable to a dependant of the member.
Other definitions
(1) In this Part—
“ abatement ”, in relation to a scheme pension to which a person has become entitled under a public service pension scheme, means the reduction of the pension (including its reduction to nil) in accordance with the rules of the pension scheme by reason of the person's employment in public service,
“ the Board of Inland Revenue ” means the Commissioners of Inland Revenue,
“ consumer prices index ” means—
the general index for consumer prices published by the Statistics Board, or
if that index is not published for a relevant month, any substituted index or index figures published by the Statistics Board,
...
“ employee ” and “ employer ” have the same meaning as in the employment income Parts of ITEPA 2003 (see sections 4 and 5 of that Act) but include (respectively) a former employee and a former employer (and “employment” is to be read accordingly),
“ the Inland Revenue ” means any officer of the Board of Inland Revenue,
“ normal minimum pension age ” means—
in relation to, and to a member of, a pension scheme that is not a uniformed services pension scheme—
before 6 April 2010, 50,
on and after that date but before 6 April 2028, 55, and
on and after 6 April 2028, 57, and
in relation to, and to a member of, a uniformed services pension scheme—
before 6 April 2010, 50, and
on and after that date, 55,
“ pension credit ” and “ pension debit ” have the same meaning as in Chapter 1 of Part 4 of WRPA (see section 46(1) of that Act) or Chapter 1 of Part 5 of WRP(NI)O 1999 (see Article 43(1) of that Order), and
“ pension sharing order or provision ” means any order or provision mentioned in section 28(1) of WRPA 1999 or Article 25(1) of WRP(NI)O 1999,
“ pensionable age ” has the meaning given by the rules in paragraph 1 of Schedule 4 to the Pensions Act 1995 or paragraph 1 of Schedule 2 to the Pensions (Northern Ireland) Order 1995,
“Scottish basic rate limit” means a rate limit set by the Scottish Parliament under section 80C(2A) of the Scotland Act 1998 for the purposes of determining the extent to which a Scottish taxpayer’s income is charged at the Scottish basic rate where a Scottish rate resolution under that Act has set more than one rate for the tax year.
...
1A In this Part, so far as it forms part of the Corporation Tax Acts, expressions which are defined for the purposes of the Income Tax Acts are to be given the same meaning as they have in the Income Tax Acts.
(1B) In this Part “ Master Trust scheme ” means a pension scheme—
(a) that is a Master Trust scheme within the meaning of the Pension Schemes Act 2017 (see sections 1 and 2 of that Act) or corresponding provision in force in Northern Ireland, and
(b) whose operation would be unlawful under Part 1 of that Act (Master Trusts), or corresponding provision in force in Northern Ireland, were the scheme not authorised under that Part or that corresponding provision.
(1C) For the purposes of determining whether the condition in subsection (1B)(b) is met, the following are to be ignored—
(a) any regulations under section 40 of the Pension Schemes Act 2017 (regulations modifying application of Part 1 of that Act);
(b) any provision in force in Northern Ireland corresponding to regulations that could be made under that section.
(1D) For the purposes of this Part a Master Trust scheme is “unauthorised” if—
(a) it is not authorised under Part 1 of the Pension Schemes Act 2017 or corresponding provision in force in Northern Ireland, and
(b) its operation would be unlawful under that Part or that corresponding provision without such authorisation.
(1E) Section 1169 of the Companies Act 2006 (dormant companies) applies for the purposes of this Part.
(1F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1G) For the purposes of this Part “ CMP periodic income ” means income payable by virtue of section 36(7)(b) or 87(7)(b) of the Pension Schemes Act 2021 (periodic income paid under collective money purchase arrangement while pursuing continuity option 1).
(2) In this Part references to payments made, or benefits provided, by a pension scheme are to payments made or benefits provided from sums or assets held for the purposes of the pension scheme.
(3) For the purposes of this Part the sums and assets held for the purposes of an arrangement under a pension scheme are so much of the sums and assets held for the purposes of the pension scheme under which the arrangement is made as are properly attributable, in accordance with the provisions of the pension scheme and any just and reasonable apportionment, to the arrangement.
(4) In this section “ uniformed services pension scheme ” means a pension scheme that—
(a) is established by or under an enactment or Royal Warrant for the benefit of persons described in subsection (5) (whether or not other persons may be members of such a scheme), or
(b) is established solely for the receipt of additional voluntary contributions from members of a scheme falling within paragraph (a) ,
subject to any regulations made under subsection (6) .
(5) Those persons are persons who are or were—
(a) members of the naval, military or air forces of the Crown (including members of any reserve force);
(b) members of a police force other than the Civil Nuclear Constabulary;
(c) firefighters.
(6) The Treasury may by regulations —
(a) amend subsection (5) by adding to, varying or omitting descriptions of persons;
(b) provide for a pension scheme not falling within subsection (4)(a) or (b) that is specified, or is of a specified description, to be treated as a uniformed services pension scheme;
(c) provide for a pension scheme falling within subsection (4)(a) or (b) that is specified, or is of a specified description, to be treated as not being a uniformed services pension scheme.
“ Specified ” means specified in the regulations.
(7) Regulations under subsection (6) may make transitional provision and savings.
Abbreviations and general index
(1) In this Part—
“ NIA 1965 ” means the National Insurance Act 1965 (c. 51),
“ NIA(NI) 1966 ” means the National Insurance Act (Northern Ireland) 1966 (c. 6 (N.I.)),
“ TMA 1970 ” means the Taxes Management Act 1970 (c. 9),
“ ICTA 1970 ” means the Income and Corporation Taxes Act 1970 (c. 10),
“ ICTA ” means the Income and Corporation Taxes Act 1988 (c. 1),
“ SSCBA 1992 ” means the Social Security Contributions and Benefits Act 1992 (c. 4),
“ SSCB(NI)A 1992 ” means the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7),
“ TCGA 1992 ” means the Taxation of Chargeable Gains Act 1992 (c. 12),
“ WRPA 1999 ” means the Welfare Reform and Pensions Act 1999 (c. 30),
“ WRP(NI)O 1999 ” means the Welfare Reform and Pensions (Northern Ireland) Order 1999 (S.I. 1999/ 3147 (N.I. 11)),
“ FISMA 2000 ” means the Financial Services and Markets Act 2000 (c. 8), ...
“ ITEPA 2003 ” means the Income Tax (Earnings and Pensions) Act 2003 (c. 1), ...
“ ITTOIA 2005 ” means the Income Tax (Trading and Other Income Act) 2005 ...
“ ITA 2007 ” means the Income Tax Act 2007 ,
“ FA 2008 ” means the Finance Act 2008, ...
“ CTA 2009 ” means the Corporation Tax Act 2009 and
“ CTA 2010 ” means the Corporation Tax Act 2010
“ FA 2012 ” means the Finance Act 2012
(2) In this Part the following expressions are defined or otherwise explained by the provisions indicated—
Other supplementary provisions
Minor and consequential amendments
(1) Schedule 35 contains minor and consequential amendments of enactments in consequence of, or otherwise in connection with, this Part.
(2) The Treasury may by order make such other amendments (including repeals and revocations) as may appear appropriate in consequence of, or otherwise in connection with, this Part—
(a) in any enactment contained in an Act passed before 6th April 2006 or in the Session in which that date falls, and
(b) in any instrument made before that date or in the Session in which that date falls.
(2A) The Treasury may by order make in any relevant enactment such amendments (including repeals and revocations) as may appear appropriate in consequence of, or otherwise in connection with, any amendment (or repeal or revocation) made in this Part by any enactment contained in an Act passed after this Act (an “amending Act”).
(2B) For this purpose a relevant enactment is—
(a) an enactment contained in an Act passed, or
(b) an instrument made,
before the passing of the amending Act or in the Session in which the amending Act is passed.
(3) An order under subsection (2) or (2A) may include any transitional provisions or savings appearing to the Treasury to be appropriate.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Orders and regulations
(A1) Any order or regulations made by the Treasury or the Commissioners for Her Majesty's Revenue and Customs under this Part may include provision having effect in relation to times before the order is, or regulations are, made if that provision does not increase any person's liability to tax.
(A2) Subsection (A1) does not limit any specific power to make provision by an order or regulations in relation to times before the order is, or regulations are, made.
(1) Any power of the Treasury or the Commissioners for Her Majesty's Revenue and Customs to make any order or regulations under this Part is exercisable by statutory instrument.
(1A) No order may be made under section 208(6), 209(7), 215(2A), 237B(11), 240(3A) or 242(5) , no order may be made under section 228(2) which specifies an amount for any tax year less than the annual allowance for the immediately preceding tax year and no order may be made under section 238A which increases any person's liability to tax unless a draft of the statutory instrument containing it has been laid before, and approved by a resolution of, the House of Commons.
(2) Any statutory instrument containing any order or regulations made by the Treasury or the Commissioners for Her Majesty's Revenue and Customs under this Part , if made without a draft having been approved by a resolution of the House of Commons, is subject to annulment in pursuance of a resolution of the House of Commons.
(3) Subsection (2) does not apply to an instrument containing only regulations under section 218(2D).
Transitionals and savings
(1) Schedule 36 contains miscellaneous transitional provisions and savings.
(2) The Treasury may by order make any other transitional provision which may appear appropriate in consequence of, or otherwise in connection with, this Part or the repeals made by this Act in consequence of this Part.
(3) An order under subsection (2) may, in particular, include savings from the effect of any amendment made by this Part or any repeal made by this Act in consequence of this Part.
(3A) The Treasury may by order make any transitional provision which may appear appropriate in consequence of, or otherwise in connection with, any amendment (or repeal or revocation) made in this Part by any enactment contained in an Act passed after this Act (an “amending Act”).
(3B) An order under subsection (3A) may, in particular, include savings from the effect of any amendment (or repeal or revocation) made by the amending Act.
(3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) Nothing in Schedule 36 limits the power conferred by subsection (2) or (3A) .
(5) Nothing in that Schedule or in any provision made by virtue of subsection (2) or (3A) prejudices the operation of sections 16 and 17 of the Interpretation Act 1978 (c. 30) (effect of repeals).
Commencement
(1) Chapters 3 to 7 and section 281 (with Schedule 35) do not come into force until 6th April 2006.
(2) But any power to make an order or regulations under any of those provisions may be exercised at any time after this Act is passed.
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