Finance Act 2004

Section 281

SCHEDULE 35U.K.Pension schemes etc: minor and consequential amendments

Taxes Management Act 1970 (c. 9)U.K.

1U.K.In section 9(1A) of the Taxes Management Act 1970 (tax not to be assessed by a self-assessment), for the words after “any tax” substitute “which—

(a)is chargeable on the scheme administrator of a registered pension scheme under Part 4 of the Finance Act 2004, F1...

[F2(ab)is chargeable on the sub-scheme administrator of a sub-scheme under Part 4 of the Finance Act 2004 as modified by the Registered Pensions (Splitting of Schemes) Regulations 2006, or]

(b)is chargeable on the person who is (or persons who are) the responsible person in relation to an employer-financed retirement benefits scheme under section 394(2) of ITEPA 2003.”

Income and Corporation Taxes Act 1988 (c. 1)U.K.

2U.K.The Income and Corporation Taxes Act 1988 (c. 1) is amended as follows.

3U.K.In section 21A(2) (Schedule A: computation of amount chargeable), insert at the end—

“sections 196 to 200 of the Finance Act 2004 (registered pension schemes); section 246 of that Act (employer-financed retirement benefits schemes).”

4U.K.In section 56(3)(b) (transfers in deposits and debts: exemption for pensions), for “592(2), 613, 614 (1) to (3) or 620(6)” substitute “ 613(4) or 614(2) or (3) or section 186 of the Finance Act 2004 ”.

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6U.K.In section 129B(2) (stock lending fees), for “sections 592(2), 608(2)(a), 613(4), 614(3), 620(6) and 643(2)” substitute “ sections 613(4) and 614(3) and section 186 of the Finance Act 2004 ”.

7U.K.In section 227(8)(a) (purchase of own shares: rules about trustees not to apply where shares held under exempt approved scheme), for “an exempt approved scheme as defined in Chapter 1 of Part 14” substitute “ a registered pension scheme ”.

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9U.K.In section 266 (1) (life assurance premiums), for “sections 274 and 619(6) and Schedules 14 and 15,” substitute “ section 274 and Schedules 14 and 15 and sections 192 to 194 of the Finance Act 2004, ”.

10(1)Section 266A (life assurance premiums paid by employer) is amended as follows.U.K.

(2)In subsection (1), for “a non-approved” substitute “ an employer-financed ”.

(3)For subsections (3) to (6) substitute—

“(3)For the purposes of subsection (1)(a) benefits are provided in respect of an employee if they are provided for the employee’s spouse [F5or civil partner], widow or widower [F6or surviving civil partner], children, dependants or personal representatives.

(4)If a sum within subsection (1) is paid with a view to the provision of benefits for or in respect of more than one employee of the employer, part of it is to be treated as paid for or in respect of each of them.

(5)The amount treated as paid for or in respect of each employee is—

(6)This section does not apply if—

(a)in the year of assessment in which the sum is paid the earnings from the employee’s employment are (or, if there are none, would be if there were any) earnings charged on remittance, or

(b)the employee is not domiciled in the United Kingdom in the tax year in which the sum is paid and the conditions in subsection (7) are met.

(7)Those conditions are—

(a)that the employment is with a foreign employer, and

(b)that, on a claim made by the employee, the Board are satisfied that the pension scheme corresponds to a registered pension scheme.

(8)In subsection (6)(a) “earnings charged on remittance” means earnings which are taxable earnings under—

(a)section 22 of ITEPA 2003 (chargeable overseas earnings for year when employee resident and ordinarily resident, but not domiciled, in UK), or

(b)section 26 of that Act (foreign earnings for year when employee resident, but not ordinarily resident, in UK).

(9)In this section—

“employer-financed retirement benefits scheme”, and

>“relevant benefits”,

have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections 393A and 393B of that Act).”

11U.K.In section 268(7)(b) (early conversion or surrender of rights: life policies not covered), for “an approved scheme, as defined in Chapter 1 of Part 14;” substitute “ a registered pension scheme; ”.

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18U.K.In section 414(7), (close companies: shares held on trust for certain pension schemes), for “an exempt approved scheme as defined in section 592” substitute “ a registered pension scheme ”.

19U.K.In section 415(4)(b), (certain quoted companies not to be close companies: shares held on trust for certain pension schemes deemed to be beneficially held for public), for “an exempt approved scheme as defined in section 592,” substitute “ a registered pension scheme, ”.

20U.K.For section 431B (life assurance: meaning of “pension business”) substitute—

“431BMeaning of “pension business”

(1)In this Chapter “pension business” means so much of a company’s life assurance business as is referable to contracts entered into for the purposes of a registered pension scheme or is the reinsurance of such business.

(2)Where a pension scheme ceases to be a registered pension scheme [F9by virtue of the withdrawal of registration of the pension scheme under section 157 of the Finance Act 2004], any of the company’s life assurance business that was pension business when the pension scheme was a registered pension scheme is to be treated as ceasing to be pension business at the beginning of the period of account of the company in which the pension scheme [F10so] ceases to be a registered pension scheme.

[F11(3)Where—

(a)immediately before 6th April 2006 an annuity contract falls within any of the descriptions of contracts specified in subsection (2) of this section as it had effect immediately before that date, but

(b)on or after that date the contract does not fall to be regarded for the purposes of this section as having been entered into for the purposes of a registered pension scheme,

the contract is to be treated for the purposes of this section as having been entered into for such purposes.”]

21U.K.In section 464(5) (policies and contracts to be disregarded in applying limits on benefits payable to member of friendly society), for paragraph (b) substitute—

“(b)any policy of insurance or annuity contract by means of which the benefits to be provided under an occupational pension scheme (within the meaning of section 150(5) of the Finance Act 2004) are secured or any annuity contract which constitutes a registered pension scheme or is issued or held in connection with a registered pension scheme other than such an occupational pension scheme;”.

22(1)Section 466 (interpretation of Chapter 2 of Part 12) is amended as follows.U.K.

(2)In subsection (2), omit the definition of “pension business”.

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23U.K.In section 467(3) (exemption for trade unions and employers' associations: disregard of certain annuities for purposes of limit), for “approved annuities (as defined in section 620(9))” substitute “ annuity contract which constitutes a registered pension scheme or is issued or held in connection with a registered pension scheme other than an occupational pension scheme (within the meaning of section 150(5) of the Finance Act 2004) ”.

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26U.K.In section 613(4) (parliamentary pension funds)—

(a)omit “respective” and paragraphs (b) to (d), and

(b)for “those funds” (in both places) substitute “ that Fund ”.

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33U.K.In section 824(9) (repayment supplements), after “settlement” insert “, scheme administrators of registered pension schemes [F21sub-scheme administrators of sub-schemes which form part of a split scheme pursuant to the Registered Pensions (Splitting of Schemes) Regulations 2006]”.

34U.K.In section 828 (orders and regulations), after subsection (5) insert—

“(6)Nothing in this section applies in relation to any of the following (in relation to which section 282 of the Finance Act 2004 applies)—

(a)any power of the Treasury or the Board to make any order or regulations under Part 4 of that Act;

(b)any statutory instrument containing any order or regulations made by the Treasury or the Board under that Part of that Act.”

35(1)Section 832 (1) (interpretation of the Tax Acts) is amended as follows.U.K.

(2)After the definition of “the rate applicable to trusts” insert—

““registered pension scheme” has the meaning given by section 150(2) of the Finance Act 2004;”.

(3)After the definition of “Schedule A business” insert—

““scheme administrator”, in relation to a pension scheme, has the meaning given by section 270 of the Finance Act 2004 (but see also sections 271 to 274 of that Act);”.

36U.K.In section 840A(1)(b)(iv) (definition of “bank”: exclusion of insurance companies), for “659B(1);” substitute “ 275 of the Finance Act 2004; ”.

Finance Act 1990 (c. 29)U.K.

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Taxation of Chargeable Gains Act 1992 (c. 12)U.K.

38U.K.The Taxation of Chargeable Gains Act 1992 is amended as follows.

39U.K.In section 13(10B)(b) (attribution of gains to members of non-resident companies), for “section 271(1)(b), (c), (d), (g) or (h) or (2)” substitute “ section 271(1)(c) or (1A) ”.

40U.K.For sections 239A and 239B (cessation of approval of retirement benefits schemes and withdrawal of approval of personal pension arrangements) substitute—

“Registered pension schemesU.K.

De-registration of registered pension schemesU.K.

239ADe-registration of registered pension schemes

(1)This section applies where tax is charged in accordance with section 242 of the Finance Act 2004 (de-registration charge) where the registration of a registered pension scheme is withdrawn.

(2)For the purposes of this Act the assets which at the relevant time are held for the purposes of the pension scheme—

(a)are treated as having been acquired at the relevant time for a consideration equal to the amount on which tax is charged by virtue of section 242 of the Finance Act 2004 by the person who would be chargeable in respect of a chargeable gain accruing on a disposal of the assets at the relevant time, and

(b)are not to be treated as having been disposed of by any person at the relevant time.

(3)In subsection (2) “the relevant time” means the time immediately before the date of withdrawal of registration of the pension scheme.”

41U.K.In section 288 (1) (interpretation), after the definition of “recognised stock exchange” insert—

““registered pension scheme” has the meaning given by section 150(2) of the Finance Act 2004;”.

42(1)Paragraph 2 of Schedule 1 (application of exempt amount and reporting limits in cases involving settled property) is amended as follows.U.K.

(2)In sub-paragraph (7)(b)(ii), for “any such scheme or fund as is mentioned in sub-paragraph (8) below” substitute “ a registered pension scheme, a superannuation fund to which section 615(3) of the Taxes Act applies or an occupational pension scheme (within the meaning of section 150(5) of the Finance Act 2004) that is not a registered pension scheme ”.

(3)Omit sub-paragraph (8).

Finance Act 1996 (c. 8)U.K.

43U.K.The Finance Act 1996 is amended as follows.

44U.K.In section 148 (mis-sold personal pensions), after subsection (6) insert—

“(6A)References in subsections (3)(d) and (6) to provisions of Part 14 of the Taxes Act 1988 are to those provisions as they had effect at the time in question.”

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Finance Act 1999 (c. 16)U.K.

46(1)Paragraph 6A of Schedule 19 to the Finance Act 1999 (stamp duty reserve tax on dealings with units in unit trusts) is amended as follows.U.K.

(2)In sub-paragraph (4), for the definition of “individual pension account” substitute—

““individual pension account” has the meaning given by regulations made by the Commissioners of Inland Revenue;”.

(3)After that sub-paragraph insert—

“(5)Regulations under sub-paragraph (4) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of the House of Commons.”

Capital Allowances Act 2001 (c. 2)U.K.

47U.K.The Capital Allowances Act 2001 is amended as follows.

48U.K.In section 4(2A) (expenditure and sums that are not capital expenditure or capital sums), in the definition of “relevant provision”, for paragraph (d) substitute—

“(d)sections 188 to 194of FA 2004 (contributions under registered pension schemes), and”.

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Finance Act 2002 (c. 23)U.K.

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Income Tax (Earnings and Pensions) Act 2003 (c. 1)U.K.

54U.K.The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.

55U.K.In section 23(3) (calculation of “chargeable overseas earnings”), in Step 2, for paragraphs (b) and (c) substitute—

“(b)sections 188 to 194 of FA 2004 (contributions to registered pension schemes), or”.

56U.K.In section 54 (1) (calculation of deemed employment payment), in Step 5, for “scheme approved under Chapter 1 or 4 of Part 14 of ICTA” substitute “ registered pension scheme ”.

57U.K.In section 56(8) (application of Income Tax Acts in relation to deemed employment), for “relevant earnings of the worker for the purposes of section 644 of ICTA (relevant earnings for purposes of permissible pension contributions).” substitute “ relevant UK earnings of the worker for the purposes of Part 4 of FA 2004. ”

58U.K.In section 218(4) (“lower-paid employment”: deductions to be subtracted), for the references to sections 592(7) and 594 of ICTA substitute— “ sections 188 to 194 of FA 2004 (contributions to registered pension schemes), or ”.

59U.K.In section 315(5) (limited exemption for expenses connected with certain living accommodation), in Step 3, for paragraph (b) substitute—

“(b)sections 188 to 194 of FA 2004 (contributions to registered pension schemes), or”.

60(1)Section 327 (deductions from earnings: general) is amended as follows.U.K.

(2)In subsection (4), omit the entry relating to section 619 of ICTA.

(3)In subsection (5), for the entries relating to sections 592(7) and 594 (1) of ICTA substitute “ and sections 188 to 194 of FA 2004 (contributions to registered pension schemes). ”

61U.K.In section 381 (deductions from seafarers' earnings: taking account of other deductions), for paragraphs (c) to (e) substitute—

“(c)section 262 of CAA 2001 (capital allowances to be given effect by treating them as deductions from earnings), and

(d)sections 188 to 194 of FA 2004 (contributions to registered pension schemes).”

62(1)Section 407 (payments and benefits on termination of employment: exception for payments and benefits under tax-exempt pension schemes) is amended as follows.U.K.

(2)In subsection (2), for paragraph (a) substitute—

“(a)a registered pension scheme,

(aa)a scheme set up by a government outside the United Kingdom for the benefit of employees or primarily for their benefit, or”.

(3)Omit subsection (3).

63(1)Section 408 (payments and benefits on termination of employment: exception for contributions to tax-exempt pension schemes) is amended as follows.U.K.

(2)In subsection (1), for “tax-exempt pension scheme or approved personal pension arrangements” substitute “ registered pension scheme ”.

(3)Omit subsection (2).

(4)In the heading, for “tax-exempt pension schemes” substitute “ registered pension schemes ”.

64U.K.In section 563 (former employees: deductions for liabilities), in the definition of “relevant retirement benefit”, for paragraphs (a) and (b) substitute—

“(a)which is received by the former employee under an employer-financed retirement benefits scheme, and

(b)which, under Chapter 2 of Part 6, counts as employment income of the former employee.”

65(1)Schedule 1 (abbreviations and defined expressions) is amended as follows.U.K.

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(3)In Part 2, insert at the appropriate place—