Taxation of Pensions Act 2014

• Citation: 2014 c. 30
• Sections: 126

Section 1 Provision for pension flexibility etc

Schedule 1 has effect. In that Schedule—

Part 1 contains provision about flexibly accessing certain drawdown funds,

Part 2 contains provision about removing certain restrictions relating to annuities to which individuals become entitled on or after 6 April 2015,

Part 3 contains provision about authorising one-off pension payments not made through a drawdown fund,

Part 4 contains provision about charging the annual allowance charge, in cases where an individual has flexibly accessed pension rights, on inputs in respect of money purchase arrangements (and some hybrid arrangements) so far as they exceed £10,000 in a tax year,

Part 5 contains further provision in connection with the taxation of pensions,

Part 6 contains provision about the giving of information, and

Part 7 contains provision about overseas pensions.

Section 2 Restriction and reduction of tax charges on certain lump sums

(1) Chapter 5 of Part 4 of FA 2004 (registered pension schemes: tax charges) is amended as follows.

(2) In section 206(1) (special lump sum death benefits charge arises where certain lump sums are paid by a registered pension scheme) after “registered pension scheme” insert “ in respect of a member who had reached the age of 75 at the date of the member's death ” .

(3) In section 206(4) (special lump sum death benefits charge: rate of charge) for “55%” substitute “ 45% ” .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) The amendments made by this section apply to lump sums paid on or after 6 April 2015.

Section 3 Death of pension scheme member

Schedule 2 has effect.

Section 4 Citation, interpretation and consequential amendments

(1) This Act may be cited as the Taxation of Pensions Act 2014.

(2) In this Act—

(a) “FA”, followed by a year, means the Finance Act of that year, and

(b) “ ITEPA 2003 ” means the Income Tax (Earnings and Pensions) Act 2003.

(3) The Commissioners for Her Majesty's Revenue and Customs may by regulations make such amendments of Part 4 of FA 2004, or Part 9 of ITEPA 2003, as the Commissioners consider appropriate in consequence of this Act.

(4) For the purposes of section 282 of FA 2004 and section 1014 of the Income Tax Act 2007 (orders and regulations), the power under subsection (3) of this section is treated as a power under Part 4 of FA 2004 (so that section 282, and not section 1014, applies in relation to regulations made under subsection (3)).

Section 1

In section 165(1) of FA 2004 (the pension rules) in pension rule 5 (annual cap on drawdown pension) after “in each drawdown pension year” insert “ from, or under a short-term annuity purchased using sums or assets out of, the member's drawdown pension fund ” .

Section 2

In paragraph 8(1A) of Schedule 28 to FA 2004 (meaning of “member's drawdown pension fund”: funds designated as available for drawdown)—

(a) in the opening words omit “they”,

(b) in paragraph (a) for “have been designated at any time” substitute “ they have, at any time before 6 April 2015, been designated ” ,

(c) before the “or” at the end of paragraph (a) insert—

(aa) they have, at any time on or after 6 April 2015, been designated under the arrangement as available for the payment of drawdown pension, and—

(i) sums or assets held for the purposes of the arrangement have, at any time before 6 April 2015, been designated under the arrangement as so available, and

(ii) section 165(3A) did not apply to the arrangement immediately before 6 April 2015,

(d) in paragraph (b)—

(i) at the beginning insert “ they ” , and

(ii) for “sums or assets which have been so designated or” substitute “ member-designated funds under paragraph (a) or (aa) or from sums or assets ” .

Section 3

(1) In Schedule 28 to FA 2004 after paragraph 8 insert—

Member's flexi-access drawdown fund

(8A)

(1) For the purposes of this Part the member's flexi-access drawdown fund in respect of an arrangement consists of such of the sums or assets held for the purposes of the arrangement as are newly-designated funds.

(2) For the purposes of this Part sums or assets held for the purposes of an arrangement are newly-designated funds if—

(a) they—

(i) have, at any time on or after 6 April 2015, been designated under the arrangement as available for the payment of drawdown pension, and

(ii) are not member-designated funds, or

(b) they were member-designated funds immediately before 6 April 2015 and section 165(3A) applied to the arrangement at that time, or

(c) they have become newly-designated funds by the operation of paragraph 8B, 8C or 8D, or

(d) they arise, or (directly or indirectly) derive, from newly-designated funds under paragraph (a), (b) or (c) or from sums or assets which so arise or derive.

(3) Any sums or assets that become newly-designated funds under sub-paragraph (2)(b) cease to be member-designated funds as from the start of 6 April 2015.

Conversion of certain drawdown pension funds into flexi-access drawdown funds

(8B)

(1) Sub-paragraph (2) applies if—

(a) a member's drawdown pension fund in respect of an arrangement came into being before 6 April 2015,

(b) section 165(3A) did not apply to the arrangement immediately before 6 April 2015, and

(c) at a time on or after 6 April 2015, a payment—

(i) of income withdrawal from the fund, or

(ii) of a short-term annuity purchased using sums or assets out of the fund,

is made that (apart from sub-paragraph (2)) would breach the cap.

(2) The sums and assets that make up the fund immediately before the payment is made become newly-designated funds immediately before the payment is made (so that the payment is made out of the member's flexi-access drawdown fund in respect of the arrangement and therefore is not part of the total capped by pension rule 5).

(3) For the purposes of sub-paragraph (1)(c), a payment of drawdown pension in respect of an arrangement is one that would breach the cap if, when its amount is added to the amounts of any drawdown pension in respect of the arrangement—

(a) paid—

(i) before it is made, but

(ii) in the same drawdown pension year in respect of the arrangement, or

(b) paid at the time it is made,

the total is greater than the cap set by pension rule 5 for that drawdown pension year.

(8C)

(1) Sub-paragraph (2) applies if—

(a) a member's drawdown pension fund in respect of an arrangement came into being before 6 April 2015,

(b) section 165(3A) did not apply to the arrangement immediately before 6 April 2015, and

(c) the member notifies the scheme administrator that the member wishes the fund to become the member's flexi-access drawdown fund in respect of the arrangement.

(2) At—

(a) the time the scheme administrator accepts the notification, or

(b) the start of 6 April 2015 if that is later,

the sums and assets that then make up that fund become newly-designated funds, if they have not previously done so by the operation of paragraph 8B.

(8D)

(1) Sub-paragraphs (2) and (3) apply if—

(a) there is a recognised transfer from one registered pension scheme (“ the old scheme ”) to another registered pension scheme (“ the new scheme ”) of member-designated funds held for the purposes of an arrangement under the old scheme, and

(b) the sums or assets transferred are, under the arrangement under the new scheme for whose purposes they are first held after the transfer, designated as available for the payment of drawdown pension.

(2) If the member, when or before making the designation, notifies the scheme administrator of the new scheme that the member wishes the sums or assets to be newly-designated funds, the sums or assets become newly-designated funds and do so—

(a) when the designation is made, or

(b) if later, immediately after the transfer,

except that, if both the designation and transfer are made before 6 April 2015, the sums or assets become newly-designated funds at the start of 6 April 2015.

(3) If sub-paragraph (2) does not provide for the sums or assets to become newly-designated funds, the sums or assets become member-designated funds and do so—

(a) when the designation is made, or

(b) if later, immediately after the transfer.

(2) Sub-paragraph (1), so far as it inserts the new paragraph 8D, has effect in relation to—

(a) cases where both the designation and transfer are made after the end of 2 months beginning with the day on which this Act is passed, and

(b) cases not within paragraph (a) where—

(i) the transfer is made before 6 April 2015 and the designation is made on or after 6 April 2015, or

(ii) the designation is made before 6 April 2015 and the transfer is made on or after 6 April 2015.

Section 4

(1) In Schedule 28 to FA 2004 after paragraph 22 insert—

Dependant's flexi-access drawdown fund

(22A)

(1) For the purposes of this Part a dependant's flexi-access drawdown fund in respect of an arrangement consists of such of the sums or assets held for the purposes of the arrangement as are newly-designated dependant funds.

(2) For the purposes of this Part sums or assets held for the purposes of an arrangement are newly-designated dependant funds if—

(a) they—

(i) have, at any time on or after 6 April 2015, been designated under the arrangement as available for the payment of dependants' drawdown pension, and

(ii) are not dependant-designated funds, or

(b) they were dependant-designated funds immediately before 6 April 2015 and section 167(2A) applied to the arrangement at that time, or

(c) they have become newly-designated dependant funds by the operation of paragraph 22B, 22C or 22D, or

(d) they arise, or (directly or indirectly) derive, from newly-designated dependant funds under paragraph (a), (b) or (c) or from sums or assets which so arise or derive.

(3) Any sums or assets that become newly-designated dependant funds under sub-paragraph (2)(b) cease to be dependant-designated funds as from the start of 6 April 2015.

Conversion of certain dependants' drawdown funds into flexi-access drawdown funds

(22B)

(1) Sub-paragraph (2) applies if—

(a) a dependant's drawdown pension fund in respect of an arrangement came into being before 6 April 2015,

(b) section 167(2A) did not apply to the arrangement immediately before 6 April 2015, and

(c) at a time on or after 6 April 2015, a payment—

(i) of dependants' income withdrawal from the fund, or

(ii) of a dependants' short-term annuity purchased using sums or assets out of the fund,

is made that (apart from sub-paragraph (2)) would breach the cap.

(2) The sums and assets that make up the fund immediately before the payment is made become newly-designated dependant funds immediately before the payment is made (so that the payment is made out of the dependant's flexi-access drawdown fund in respect of the arrangement and therefore is not part of the total capped by pension death benefit rule 4).

(3) For the purposes of sub-paragraph (1)(c), a payment of dependants' drawdown pension in respect of an arrangement is one that would breach the cap if, when its amount is added to the amounts of any dependants' drawdown pension in respect of the arrangement—

(a) paid—

(i) before it is made, but

(ii) in the same drawdown pension year in respect of the arrangement, or

(b) paid at the time it is made,

the total is greater than the cap set by pension death benefit rule 4 for that drawdown pension year.

(22C)

(1) Sub-paragraph (2) applies if—

(a) a dependant's drawdown pension fund in respect of an arrangement came into being before 6 April 2015,

(b) section 167(2A) did not apply to the arrangement immediately before 6 April 2015, and

(c) the dependant notifies the scheme administrator that the dependant wishes the fund to become the dependant's flexi-access drawdown fund in respect of the arrangement.

(2) At—

(a) the time the scheme administrator accepts the notification, or

(b) the start of 6 April 2015 if that is later,

the sums and assets that then make up that fund become newly-designated dependant funds, if they have not previously done so by the operation of paragraph 22B.

(22D)

(1) Sub-paragraphs (2) and (3) apply if—

(a) there is a recognised transfer from one registered pension scheme (“ the old scheme ”) to another registered pension scheme (“ the new scheme ”) of dependant-designated funds held for the purposes of an arrangement under the old scheme, and

(b) the sums or assets transferred are, under the arrangement under the new scheme for whose purposes they are first held after the transfer, designated as available for the payment of drawdown pension.

(2) If the dependant, when or before the designation is made, notifies the scheme administrator of the new scheme that the dependant wishes the sums or assets to be newly-designated dependant funds, the sums or assets become newly-designated dependant funds and do so—

(a) when the designation is made, or

(b) if later, immediately after the transfer,

except that, if both the designation and transfer are made before 6 April 2015, the sums or assets become newly-designated dependant funds at the start of 6 April 2015.

(3) If sub-paragraph (2) does not provide for the sums or assets to become newly-designated dependant funds, the sums or assets become dependant-designated funds and do so—

(a) when the designation is made, or

(b) if later, immediately after the transfer.

(2) Sub-paragraph (1), so far as it inserts the new paragraph 22D, has effect in relation to—

(a) cases where both the designation and transfer are made after the end of 2 months beginning with the day on which this Act is passed, and

(b) cases not within paragraph (a) where—

(i) the transfer is made before 6 April 2015 and the designation is made on or after 6 April 2015, or

(ii) the designation is made before 6 April 2015 and the transfer is made on or after 6 April 2015.

Section 5

FA 2004 is amended as follows.

Section 6

In section 167(1) (the pension death benefit rules) in pension death benefit rule 4 (annual cap on dependants' drawdown pension) after “in each drawdown pension year” insert “from, or under a dependants' short-term annuity purchased using sums or assets out of, the dependant's drawdown pension fund”.

Section 7

In section 168(1), in the lump sum death benefit rule, after paragraph (e) insert—

(ea) a flexi-access drawdown fund lump sum death benefit,

Section 8

In section 169(1D) (regulations about transfers of drawdown funds) after paragraph (a) insert

or

(aa) a member's flexi-access drawdown fund or dependant's flexi-access drawdown fund,

Section 9

In section 172B(2) (rights of a “relevant member”)—

(a) omit the “or” at the end of paragraph (aa), and

(b) after paragraph (b) insert

, or

(c) rights representing the member's flexi-access drawdown fund or dependant's flexi-access drawdown fund in respect of an arrangement under the pension scheme.

Section 10

In section 172B(7A) (section does not apply to certain increases in rights) after “dependant's drawdown pension fund” (in both places) insert “ or dependant's flexi-access drawdown fund ” .

Section 11

In section 182(3) (value of arrangement for purposes of borrowing limits)—

(a) after paragraph (a) insert—

(aa) the amount of such of the sums and the market value of such of the assets as represent the member's flexi-access drawdown fund in respect of the arrangement (if any),

(b) in paragraph (b) after “dependants' drawdown pension funds” insert “or dependants' flexi-access drawdown funds”.

Section 12

In section 182(5) (determining whether rights are uncrystallised) after “the person's drawdown pension fund” insert “ or the person's flexi-access drawdown fund ” .

Section 13

In section 206(1) (payments which trigger special lump sum death benefits charge)—

(a) omit the “or” at the end of paragraph (b), and

(b) after paragraph (c) insert

or

(d) a flexi-access drawdown fund lump sum death benefit,

Section 14

In section 211(1) (value of crystallised rights for purposes of section 210)—

(a) omit the “and” at the end of paragraph (a), and

(b) after paragraph (b) insert

, and

(c) the aggregate of the amount of the sums, and the market value of the assets, representing the member's flexi-access drawdown fund in respect of the arrangement on that date (if any).

Section 15

In section 212(2) (value of uncrystallised rights for purposes of section 210: rights which are not uncrystallised) after “the member's drawdown pension fund” insert “ or the member's flexi-access drawdown fund ” .

Section 16

In section 216(1) (benefit crystallisation events and amounts crystallised), in column 2 of the entry in the table for benefit crystallisation event 5A, after “representing the individual's drawdown pension fund under the arrangement” insert “ (if any), plus the aggregate of the amount of the sums and the market value of the assets representing the individual's flexi-access drawdown fund under the arrangement (if any), ” .

Section 17

In section 273A(1) (regulations about certain payments by insurance companies)—

(a) omit the “or” at the end of paragraph (b), and

(b) after paragraph (c) insert

or

(d) a flexi-access drawdown fund lump sum death benefit,

Section 18

In section 280(2) (index of defined expressions) at the appropriate places insert—

Section 19

In paragraph 7 of Schedule 28 (meaning of “income withdrawal”) at the end insert “ or from the member's flexi-access drawdown fund in respect of an arrangement ” .

Section 20

In paragraph 21 of Schedule 28 (meaning of “dependants' income withdrawal”) at the end insert “ or from the dependant's flexi-access drawdown fund in respect of an arrangement ” .

Section 21

In paragraph 22(2) of Schedule 28 (meaning of “dependant's drawdown pension fund”: funds designated as available for dependants' drawdown pension)—

(a) in the opening words omit “they”,

(b) in paragraph (a) for “have been designated at any time” substitute “ they have, at any time before 6 April 2015, been designated ” ,

(c) before the “or” at the end of paragraph (a) insert—

(aa) they have, at any time on or after 6 April 2015, been designated under the arrangement as available for the payment of dependants' drawdown pension to the dependant, and—

(i) sums or assets held for the purposes of the arrangement have, at any time before 6 April 2015, been designated under the arrangement as so available, and

(ii) section 167(2A) did not apply to the arrangement immediately before 6 April 2015,

(d) in paragraph (b)—

(i) at the beginning insert “ they ” , and

(ii) for “sums or assets which have been so designated or” substitute “ dependant-designated funds under paragraph (a) or (aa) or from sums or assets ” .

Section 22

In paragraph 3(5)(a) and (8)(a) of Schedule 29 (deductions when calculating “applicable amount”) after “of the member's drawdown pension fund” insert “ or of the member's flexi-access drawdown fund ” .

Section 23

In paragraph 17 of Schedule 29 (meaning of “drawdown pension fund lump sum death benefit”)—

(a) in sub-paragraph (1)(a) for “under” substitute “ to be paid from the member's drawdown pension fund in respect of ” , and

(b) in sub-paragraph (2)(c) after “at the date of the dependant's death” insert “ to be paid from the dependant's drawdown pension fund ” .

Section 24

In Schedule 29 after paragraph 17 insert—

Flexi-access drawdown fund lump sum death benefit

(17A)

(1) For the purposes of this Part a lump sum death benefit is a flexi-access drawdown fund lump sum death benefit if—

(a) it is paid in respect of income withdrawal to which the member was entitled to be paid from the member's flexi-access drawdown fund in respect of an arrangement at the date of the member's death, and

(b) it is not a charity lump sum death benefit.

(2) A lump sum death benefit is also a flexi-access drawdown fund lump sum death benefit if—

(a) it is paid on the death of a dependant of the member,

(b) it is paid in respect of dependants' income withdrawal to which the dependant was at the date of the dependant's death entitled to be paid from the dependant's flexi-access drawdown fund in respect of an arrangement relating to the member, and

(c) it is not a charity lump sum death benefit.

(3) A lump sum death benefit is also a flexi-access drawdown fund lump sum death benefit if—

(a) it is paid on the death of a nominee of the member,

(b) it is paid in respect of nominees' income withdrawal to which the nominee was at the date of the nominee's death entitled to be paid from the nominee's flexi-access drawdown fund in respect of an arrangement relating to the member, and

(c) it is not a charity lump sum death benefit.

(4) A lump sum death benefit is also a flexi-access drawdown fund lump sum death benefit if—

(a) it is paid on the death of a successor of the member,

(b) it is paid in respect of successors' income withdrawal to which the successor was at the date of the successor's death entitled to be paid from the successor's flexi-access drawdown fund in respect of an arrangement relating to the member, and

(c) it is not a charity lump sum death benefit.

(5) But if the amount of a lump sum falling within sub-paragraph (1), (2), (3) or (4) exceeds the permitted maximum, the excess is not a flexi-access drawdown fund lump sum death benefit.

(6) The permitted maximum is the aggregate of—

(a) the amount of the sums, and

(b) the market value of the assets,

representing the member's, dependant's, nominee's or successor's flexi-access drawdown fund in respect of the arrangement immediately before the payment is made.

Section 25

In paragraph 18 of Schedule 29 (meaning of “charity lump sum death benefit”)—

(a) in sub-paragraph (1)(c) after “in respect of an arrangement” insert “ , or in respect of the member's flexi-access drawdown fund in respect of an arrangement, ” ,

(b) in sub-paragraph (2)(d) after “dependant's drawdown pension fund” insert “ , or the dependant's flexi-access drawdown fund, ” , and

(c) in sub-paragraph (4) after “drawdown pension fund” insert “ , or flexi-access drawdown fund, ” .

Section 26

In paragraph 4(1) of Schedule 32 (supplementary provision about benefit crystallisation event 4) at the end insert “ or flexi-access drawdown fund ” .

Section 27

In paragraph 17(2) of Schedule 32 (supplementary provision about benefit crystallisation event 8) after “the individual's drawdown pension fund” insert “ or flexi-access drawdown fund ” .

Section 28

(1) In paragraph 20(4) of Schedule 36 (lifetime allowance: deemed crystallisation: value of rights to pre-5 April 2006 drawdown pensions)—

(a) in paragraph (b) (arrangements where section 165(3A) of FA 2004 applies) for “applies” substitute “ applied at any time before 6 April 2015 ” , and

(b) after paragraph (b) insert

, or

(c) in the case of an arrangement to which section 165(3A) never applied but only if the time falls after the member's drawdown pension fund in respect of the arrangement is converted into the member's flexi-access drawdown fund in respect of the arrangement by the operation of any of paragraphs 8B to 8D of Schedule 28, 80% of the maximum amount that could have been paid in accordance with pension rule 5 in the drawdown pension year in which the conversion occurs had no conversion happened in that year by the operation of any of paragraphs 8B to 8D of Schedule 28.

(2) The amendments made by sub-paragraph (1) come into force on 6 April 2015.

Section 29

In paragraph 29(3) of Schedule 36 (modifications of paragraph 3 of Schedule 29 for cases involving protected lump sum rights), in the sub-paragraph (5)(a) treated as substituted in paragraph 3 of Schedule 29, after “ member's drawdown pension fund ” insert “ or flexi-access drawdown fund ” .

Section 30

(1) In regulation 2(1) of the Pension Benefits (Insurance Company Liable as Scheme Administrator) Regulations 2006 ( S.I. 2006/136) (payments in relation to which the insurance company is liable as scheme administrator)—

(a) omit the “or” at the end of sub-paragraph (b), and

(b) after sub-paragraph (c) insert

, or

(d) a flexi-access drawdown fund lump sum death benefit.

(2) The amendment made by sub-paragraph (1) is to be treated as having been made by the Commissioners for Her Majesty's Revenue and Customs in exercise of their powers under section 273A of FA 2004 (as amended by this Schedule).

Section 31

In section 636A of ITEPA 2003 (taxation of pension lump sums)—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) in subsection (7) (definitions) after “ “drawdown pension fund lump sum death benefit”,” insert—

“flexi-access drawdown fund lump sum death benefit”,

Section 32

(1) In FA 2004 omit—

(a) in section 165(1), in pension rule 5, the second sentence,

(b) section 165(3A) and (3B),

(c) in section 167(1), in pension death benefit rule 4, the second sentence,

(d) section 167(2A) and (2B),

(e) in Schedule 28—

(i) paragraph 10(11),

(ii) paragraph 10A(11),

(iii) paragraphs 14A to 14E,

(iv) paragraph 24(11),

(v) paragraph 24A(9), and

(vi) paragraphs 24C to 24G, and

(f) in Schedule 34, paragraph 4A.

(2) In consequence of sub-paragraph (1), in Schedule 16 to FA 2011 omit paragraphs 1(3), 8(12), 10, 11(3), 18(12), 20 and 81(3).

(3) The Registered Pension Schemes (Prescribed Requirements of Flexible Drawdown Declaration) Regulations 2011 (S.I. 2011/1792) are revoked.

(4) The amendments made by sub-paragraphs (1) to (3) come into force on 6 April 2015.

Section 33

(1) The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (S.I. 2006/207) are amended as follows.

(2) In regulations 6 and 7 omit paragraph (b) and the “and” preceding it.

(3) In regulation 14(3)—

(a) after paragraph (b) insert—

(ba) paragraphs 8C and 8D (in each place where the expression occurs);

(b) omit paragraph (da),

(c) after paragraph (e) insert—

(ea) paragraphs 22C and 22D (in each place where the expression occurs);

(d) omit paragraph (fc).

(4) The amendments made by sub-paragraphs (2) and (3) come into force on 6 April 2015.

(5) The amendments made by sub-paragraph (3)(a) and (c) are to be treated as having been made by the Commissioners for Her Majesty's Revenue and Customs under such of the powers conferred on them by Schedule 34 to FA 2004 (as amended by this Schedule) as are applicable.

Section 34

(1) Regulation 12 of the Registered Pension Schemes (Transfer of Sums and Assets) Regulations 2006 (S.I. 2006/499) (drawdown funds—recognised transfers) is amended as follows.

(2) In the heading after “fund” (in both places) insert “ or flexi-access drawdown fund ” .

(3) In paragraph (1) (transfer recognised only if transferred items are only items held under arrangement to which transfer made) after “represent a” insert “ member's flexi-access drawdown fund, dependant's flexi-access drawdown fund, ” .

(4) In paragraph (2) (transferred items treated for certain purposes as remaining held under fund from which transfer made) before sub-paragraph (a) insert—

(za) in the case of a member's flexi-access drawdown fund, in the entries in table 3 for provisions not in Schedule 28,

(5) In table 3, in the heading, after “Prescribed purposes—” insert “ member's flexi-access drawdown fund or ” .

(6) In table 3 omit the entry for section 165(3A) of FA 2004.

(7) In table 4 omit the entry for section 167(2A) of FA 2004.

(8) The amendments made by this paragraph—

(a) come into force on 6 April 2015, and

(b) are to be treated as having been made by the Commissioners for Revenue and Customs under the powers to make regulations conferred by section 169(1D) and (1E) of FA 2004 (as amended by this Schedule).

Section 35

(1) The Registered Pension Schemes (Provision of Information) Regulations 2006 (S.I. 2006/567) are amended as follows.

(2) In the table in regulation 3(1), omit the entry for reportable event 21 (reporting that section 165(3A) or 167(2A) of FA 2004 applies).

(3) Omit regulation 5B (reports for the tax year 2011-12).

(4) In regulation 16(1) (information for insurance company provided with funds otherwise than from a drawdown pension fund) after “drawdown pension fund” insert “ or flexi-access drawdown fund ” .

(5) In regulation 17(1) (information for insurance company provided with funds from a drawdown pension fund) after “drawdown pension fund” insert “ or flexi-access drawdown fund ” .

(6) In regulation 17(2) and (4) after “of the member's drawdown pension fund” insert “ or of the member's flexi-access drawdown fund ” .

(7) The amendments made by sub-paragraphs (4) to (6) are to be treated as having been made by the Commissioners for Her Majesty's Revenue and Customs under such of the powers cited in the instrument containing the Regulations as are applicable.

(8) In consequence of sub-paragraph (2), omit regulation 4(9) of the Registered Pension Schemes (Provision of Information) (Amendment) ( No. 2) Regulations 2011 (S.I. 2011/1797).

(9) In consequence of sub-paragraph (3), omit regulation 5 of those 2011 Regulations.

(10) The amendments made by sub-paragraphs (2) and (8) have effect in relation to reports for the tax year 2015-16 and subsequent tax years.

(11) The amendments made by sub-paragraphs (3) and (9) come into force on 6 April 2015 but without prejudice to the continued operation of the revoked provisions in relation to reports for the tax year 2011-12.

(12) The amendments made by sub-paragraphs (4) to (6) come into force on 6 April 2015.

Section 36

Schedule 28 to FA 2004 (registered pension schemes) is amended as follows.

Section 37

In paragraph 3 (definition of member's lifetime annuity) after sub-paragraph (1) insert—

(1A) For the purposes of this Part, but subject to any provision made under sub-paragraph (2C)(za), an annuity payable to the member is also a lifetime annuity if—

(a) it is payable by an insurance company,

(b) the member becomes entitled to it on or after 6 April 2015, and

(c) it is payable until the member's death or until the later of the member's death and the end of a term certain.

Section 38

In paragraph 6 (definition of member's short-term annuity) after sub-paragraph (1) insert—

(1ZA) For the purposes of this Part, but subject to any provision made under sub-paragraph (1C)(za), an annuity payable to the member is also a short-term annuity if—

(a) it is purchased by the application of sums or assets representing the whole or any part of the member's drawdown pension fund, or of the member's flexi-access drawdown fund, in respect of an arrangement,

(b) it is payable by an insurance company,

(c) the member becomes entitled to it on or after 6 April 2015, and

(d) it is payable for a term which does not exceed five years.

Section 39

In paragraph 17 (definition of dependants' annuity) after sub-paragraph (1) insert—

(1ZA) For the purposes of this Part, but subject to any provision made under sub-paragraph (4)(za), an annuity payable to a dependant is also a dependants' annuity if—

(a) either—

(i) it is purchased together with a lifetime annuity payable to the member and the member becomes entitled to that lifetime annuity on or after 6 April 2015, or

(ii) it is purchased after the member's death and the dependant becomes entitled to it on or after 6 April 2015,

(b) it is payable by an insurance company,

(c) where the dependant is not the member's child, it is payable until the dependant's death or until the earliest of the dependant's marrying, entering into a civil partnership or dying, and

(d) where the dependant is the member's child, it is payable until the earlier of the dependant's ceasing to be a dependant or dying, or until the earliest of the dependant's marrying, entering into a civil partnership, ceasing to be a dependant or dying.

Section 40

In paragraph 20 (definition of dependants' short-term annuity) after sub-paragraph (1) insert—

(1ZA) For the purposes of this Part, but subject to any provision made under sub-paragraph (1C)(za), an annuity payable to a dependant is also a dependants' short-term annuity if—

(a) it is purchased by the application of sums or assets representing the whole or any part of the dependant's drawdown pension fund, or of the dependant's flexi-access drawdown fund, in respect of an arrangement,

(b) it is payable by an insurance company,

(c) the dependant becomes entitled to it on or after 6 April 2015, and

(d) it is payable for a term which does not exceed five years and ends before the dependant dies.

Section 41

In section 165(1) of FA 2004 (the pension rules) in pension rule 2 (death of a member)—

(a) in the first sentence after “an annuity,” insert “ and if in the case of an annuity that day was before 6 April 2015, ” ,

(b) after that sentence insert—

If the member becomes entitled to an annuity on or after 6 April 2015 and the annuity is payable until the later of the member's death and the end of a term certain, payment of the annuity may continue to be made (to any person) until the end of that term.

(c) in the final sentence for “But no other” substitute “ Except as provided by the preceding provisions of this rule, no ” .

Section 42

Schedule 28 to FA 2004 (registered pension schemes) is further amended as follows.

Section 43

In paragraph 3(1) (definition of member's lifetime annuity) after paragraph (b) insert—

(ba) the member becomes entitled to it before 6 April 2015,

Section 44

(1) In paragraph 3(2C) (regulations for cases where lifetime annuity ceases and funds are transferred)—

(a) before paragraph (a) insert—

(za) in a case where—

(i) a new annuity becomes payable,

(ii) the member becomes entitled to it on or after 6 April 2015,

(iii) it would be a lifetime annuity if any provision made under this paragraph were ignored,

(iv) the terms of the contract for it are such that there will or could be decreases in its amount other than allowed decreases (see sub-paragraph (2E)), and

(v) any other conditions prescribed by the regulations are met,

the new annuity is not a lifetime annuity for the purposes of this Part,

(b) in paragraph (b) for “any other case” substitute “ a case other than one where a new lifetime annuity becomes payable ” .

(2) In paragraph 3 after sub-paragraph (2D) insert—

(2E) In sub-paragraph (2C)(za)(iv) “ allowed decreases ” means decreases from time to time allowed by regulations under sub-paragraph (1)(d); and any such regulations are to be treated as having effect for this purpose.

Section 45

In paragraph 6(1) (definition of member's short-term annuity) after paragraph (c) insert—

(ca) the member becomes entitled to it before 6 April 2015,

Section 46

(1) In paragraph 6(1C) (regulations for cases where short-term annuity ceases and funds are transferred)—

(a) before paragraph (a) insert—

(za) in a case where—

(i) a new annuity becomes payable,

(ii) the member becomes entitled to it on or after 6 April 2015,

(iii) it would be a short-term annuity if any provision made under this paragraph were ignored,

(iv) the terms of the contract for it are such that there will or could be decreases in its amount other than allowed decreases (see sub-paragraph (1E)), and

(v) any other conditions prescribed by the regulations are met,

the new annuity is not a short-term annuity for the purposes of this Part,

(b) in paragraph (b) for “any other case” substitute “ a case other than one where a new short-term annuity becomes payable ” .

(2) In paragraph 6 after sub-paragraph (1D) insert—

(1E) In sub-paragraph (1C)(za)(iv) “ allowed decreases ” means decreases from time to time allowed by regulations under sub-paragraph (1)(e); and any such regulations are to be treated as having effect for this purpose.