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SCHEDULES

SCHEDULE 16E+W+S+N.I.Benefits under pension schemes

Part 3 E+W+S+N.I.Commencement and transitional provision

GeneralE+W+S+N.I.

85Subject to the provisions of this Part, the amendments made by this Schedule have effect for the tax year 2011-12 and subsequent tax years.E+W+S+N.I.

Entitlement to unsecured or alternatively secured pension on 5 April 2011E+W+S+N.I.

86Any person who, immediately before 6 April 2011, was entitled to unsecured pension or alternatively secured pension is to be treated, on and after that date, as entitled to drawdown pension.E+W+S+N.I.

87Paragraph 6 of Schedule 28 to FA 2004 (short-term annuity) has effect on and after 6 April 2011 as if the reference to an annuity purchased by the application of sums or assets representing the whole or any part of the member's drawdown pension fund in respect of an arrangement included a reference to an annuity purchased before that date by the application of sums or assets representing the whole or any part of the member's unsecured pension fund in respect of the arrangement.E+W+S+N.I.

Member's unsecured or alternatively secured pension fund existing on 5 April 2011E+W+S+N.I.

88Paragraph 8(1A) of Schedule 28 to FA 2004 (member's drawdown pension fund) has effect on and after 6 April 2011 as if any reference to sums or assets having been designated as available for the payment of drawdown pension included a reference to sums or assets having been designated, before that date, as available for the payment of unsecured pension or alternatively secured pension.E+W+S+N.I.

Current unsecured pension year to become drawdown pension yearE+W+S+N.I.

89(1)This paragraph applies in the case of a person who, immediately before 6 April 2011, was entitled to unsecured pension.E+W+S+N.I.

(2)Where the last unsecured pension year began on or after 7 April 2010, the reference in paragraph 9(1)(a) of Schedule 28 to FA 2004 (drawdown pension year) to the day on which the member first becomes entitled to drawdown pension is to be read as a reference to the day on which that unsecured pension year began.

(3)Accordingly, any unsecured pension year which began on or after 7 April 2010 is to be regarded, on and after 6 April 2011, as a drawdown pension year.

(4)In this paragraph and paragraphs 90 and 91 “the last unsecured pension year” means the unsecured pension year in which 5 April 2011 fell.

Previous limit on amount of pension payable in year to apply for limited periodE+W+S+N.I.

90(1)This paragraph applies in the case of a person who, immediately before 6 April 2011—E+W+S+N.I.

(a)was entitled to unsecured pension, and

(b)had not reached the age of 75.

(2)Where, immediately before 6 April 2011, the last reference period to begin before that date has not ended—

(a)pension rule 5 in section 165 of FA 2004 has effect in relation to every drawdown pension year ending on or before the relevant date as if for “100%” there were substituted “ 120% ”, and

(b)paragraph 10 of Schedule 28 to FA 2004 has effect with the following modifications—

(i)the reference in sub-paragraph (1) to the first drawdown pension year is to be read as a reference to the first drawdown pension year beginning after the relevant date;

(ii)any reference in sub-paragraphs (1ZA) to (1C) to a reference period is to be read as including a reference to the current reference period.

(3)The “relevant date” is the earlier of the following—

(a)the day on which the current reference period ends, and

(b)if a transfer within sub-paragraph (5) occurs in relation to the person, the day on which the drawdown pension year in which the transfer takes place ends.

(4)Subject to the operation of paragraph 10(1ZA) and (1B) of Schedule 28 to FA 2004, “the current reference period” is the period of 5 years beginning before 6 April 2011 and comprising—

(a)the drawdown pension year in which that date falls,

(b)any unsecured pension years which—

(i)began after the end of the last reference period ending before that date, and

(ii)ended before that date,

and

(c)if the sum of the years falling within paragraphs (a) and (b) is less than five, one or more drawdown pension years beginning after that date.

(5)A transfer is within this sub-paragraph if—

(a)it takes place on or after 6 April 2011, and

(b)it is a recognised transfer for the purposes of Part 4 of FA 2004 (see section 169 of that Act).

(6)For the purposes of pension rule 5 in section 165 of FA 2004, the amount which, immediately before 6 April 2011, was by virtue of paragraph 10 of Schedule 28 to FA 2004 the basis amount for the last unsecured pension year continues, on and after that date, to be the basis amount for every drawdown pension year ending on or before the relevant date.

This is subject to sub-paragraphs (4)(b) and (5) of that paragraph.

(7)Paragraph 10(4) of Schedule 28 to FA 2004 has effect for drawdown pension years beginning on or after 6 April 2011 and ending on or before the relevant date as it has effect for drawdown pension years falling within any reference period beginning after the relevant date, but as if—

(a)paragraph (a) were omitted,

(b)in paragraph (b), for “otherwise” there were substituted “ if there has been a recent annuity, recent additional fund designation or recent pension sharing event ”, and

(c)in paragraph 10(9) of that Schedule—

(i)the reference to the reference date were a reference to the day on which the last unsecured pension year began, and

(ii)the reference to the immediately preceding drawdown pension year included, in the case of a drawdown pension year beginning on 6 April 2011, a reference to the last unsecured pension year.

(8)In paragraph 10(7) to (8A) of that Schedule any reference to drawdown pension or the member's drawdown pension fund is to be read as including, in relation to anything occurring before 6 April 2011, a reference to unsecured pension or the member's unsecured pension fund.

91(1)This paragraph applies in the case of a person who—E+W+S+N.I.

(a)reached the age of 75 on or after 22 June 2010 and before 6 April 2011, and

(b)immediately before 6 April 2011, was entitled to unsecured pension.

(2)Where the last unsecured pension year began on or after 7 April 2010—

(a)pension rule 5 in section 165 of FA 2004 has effect in relation to that year as if for “100%” there were substituted “ 120% ”, and

(b)for the purposes of that pension rule, the amount which, immediately before 6 April 2011, was the basis amount for that year by virtue of paragraph 10 of Schedule 28 to FA 2004 continues, on and after that date, to be the basis amount for that year.

(3)The amendments made by paragraph 9 of this Schedule have effect in relation to drawdown pension years beginning on or after 6 April 2011.

Drawdown pension year and basis amount where person's whereabouts unknown at age 75E+W+S+N.I.

92(1)This paragraph applies in the case of a person who—E+W+S+N.I.

(a)reached the age of 75 before 22 June 2010, and

(b)immediately before 6 April 2011, had a member's unsecured pension fund by virtue of paragraph 11(6) and (7) of Schedule 28 to FA 2004 (cases where member's whereabouts are unknown at age 75).

(2)In a case where—

(a)the scheme administrator was unable to ascertain the person's whereabouts during the relevant period, but

(b)the person's whereabouts are ascertained by the scheme administrator after the end of that period,

the reference in paragraph 9(1)(a) of Schedule 28 to FA 2004 (drawdown pension year) to the day on which the member first becomes entitled to drawdown pension is to be read as a reference to the day on which the person's whereabouts are so ascertained.

(3)The “relevant period” is the period beginning with the person's 75th birthday and ending with 5 April 2011.

(4)In a case where the person's whereabouts have been ascertained by the scheme administrator within the period of 6 months ending on 6 April 2011, the reference in paragraph 9(1)(a) of that Schedule to the day on which the member first becomes entitled to drawdown pension is to be read as a reference to 6 April 2011.

Current alternatively secured pension year to become drawdown pension yearE+W+S+N.I.

93(1)This paragraph applies in the case of a person who, immediately before 6 April 2011, was entitled to alternatively secured pension.E+W+S+N.I.

(2)Where the last alternatively secured pension year began on or after 7 April 2010, the reference in paragraph 9(1)(a) of Schedule 28 to FA 2004 (drawdown pension year) to the day on which the member first becomes entitled to drawdown pension is to be read as a reference to the day on which that alternatively secured pension year began.

(3)Accordingly, any alternatively secured pension year which began on or after 7 April 2010 is to be regarded, on and after 6 April 2011, as a drawdown pension year.

(4)For the purposes of pension rule 5 in section 165 of FA 2004, the amount which, immediately before 6 April 2011, was the basis amount for that alternatively secured pension year by virtue of paragraph 13 of Schedule 28 to FA 2004 continues, on and after that date, to be the basis amount for that year.

(5)In this paragraph “the last alternatively secured pension year” means the alternatively secured pension year in which 5 April 2011 fell.

Entitlement to dependants' unsecured or alternatively secured pension on 5 April 2011E+W+S+N.I.

94Any person who, immediately before 6 April 2011, was entitled to dependants' unsecured pension or dependants' alternatively secured pension is to be treated, on and after that date, as entitled to dependants' drawdown pension.E+W+S+N.I.

95Paragraph 20 of Schedule 28 to FA 2004 (short-term annuity) has effect on and after 6 April 2011 as if the reference to an annuity purchased by the application of sums or assets representing the whole or any part of the dependant's drawdown pension fund in respect of an arrangement included a reference to an annuity purchased before that date by the application of sums or assets representing the whole or any part of the dependant's unsecured pension fund in respect of the arrangement.E+W+S+N.I.

Dependant's unsecured or alternatively secured pension fund existing on 5 April 2011E+W+S+N.I.

96Paragraph 22(2) of Schedule 28 to FA 2004 (dependant's drawdown pension fund) has effect on and after 6 April 2011 as if any reference to sums or assets having been designated as available for the payment of dependants' drawdown pension included a reference to sums or assets having been designated, before that date, as available for the payment of dependants' unsecured pension or dependants' alternatively secured pension.E+W+S+N.I.

Current unsecured pension year to become drawdown pension yearE+W+S+N.I.

97(1)This paragraph applies in the case of a person who, immediately before 6 April 2011, was entitled to dependants' unsecured pension.E+W+S+N.I.

(2)Where the last unsecured pension year began on or after 7 April 2010, the reference in paragraph 23(1)(a) of Schedule 28 to FA 2004 (drawdown pension year) to the day on which the dependant first becomes entitled to dependants' drawdown pension is to be read as a reference to the day on which that unsecured pension year began.

(3)Accordingly, any unsecured pension year which began on or after 7 April 2010 is to be regarded, on and after 6 April 2011, as a drawdown pension year.

(4)In this paragraph and paragraphs 98 and 99 “the last unsecured pension year” means the unsecured pension year in which 5 April 2011 fell.

Previous limit on amount of pension payable in year to apply for limited periodE+W+S+N.I.

98(1)This paragraph applies in the case of a person who, immediately before 6 April 2011—E+W+S+N.I.

(a)was entitled to dependants' unsecured pension, and

(b)had not reached the age of 75.

(2)Where, immediately before 6 April 2011, the last reference period to begin before that date has not ended—

(a)pension death benefit rule 4 in section 167 of FA 2004 has effect in relation to every drawdown pension year ending on or before the relevant date as if for “100%” there were substituted “ 120% ”, and

(b)paragraph 24 of Schedule 28 to FA 2004 has effect with the following modifications—

(i)the reference in sub-paragraph (1) to the first drawdown pension year is to be read as a reference to the first drawdown pension year beginning after the relevant date;

(ii)any reference in sub-paragraphs (1ZA) to (1C) to a reference period is to be read as including a reference to the current reference period.

(3)The “relevant date” is the earlier of the following—

(a)the day on which the current reference period ends, and

(b)if a transfer within sub-paragraph (5) occurs in relation to the person, the day on which the drawdown pension year in which the transfer takes place ends.

(4)Subject to the operation of paragraph 24(1ZA) and (1B) of Schedule 28 to FA 2004, “the current reference period” is the period of 5 years beginning before 6 April 2011 and comprising—

(a)the drawdown pension year in which that date falls,

(b)any unsecured pension years that—

(i)began after the end of the last reference period ending before that date, and

(ii)ended before that date,

and

(c)if the sum of the years falling within paragraphs (a) and (b) is less than five, one or more drawdown pension years beginning after that date.

(5)A transfer is within this sub-paragraph if—

(a)it takes place on or after 6 April 2011, and

(b)it is a recognised transfer for the purposes of Part 4 of FA 2004 (see section 169 of that Act).

(6)For the purposes of pension death benefit rule 4 in section 167 of FA 2004, the amount which, immediately before 6 April 2011, was by virtue of paragraph 24 of Schedule 28 to FA 2004 the basis amount for the last unsecured pension year continues, on and after that date, to be the basis amount for every drawdown pension year ending on or before the relevant date.

This is subject to sub-paragraphs (4)(b) and (5) of that paragraph.

(7)Paragraph 24(4) of Schedule 28 to FA 2004 has effect for drawdown pension years beginning after 6 April 2011 and ending on or before the relevant date as it has effect for drawdown pension years falling within any reference period beginning after the relevant date, but as if—

(a)paragraph (a) were omitted,

(b)in paragraph (b), for “otherwise” there were substituted “ if there has been a recent annuity, recent additional fund designation or recent pension sharing event ”, and

(c)in paragraph 24(9) of that Schedule—

(i)the reference to the reference date were a reference to the day on which the last unsecured pension year began, and

(ii)the reference to the immediately preceding drawdown pension year included, in the case of a drawdown pension year beginning on 6 April 2011, a reference to the last unsecured pension year.

(8)In paragraph 24(7) to (8A) of that Schedule any reference to dependants' drawdown pension or the dependant's drawdown pension fund is to be read as including, in relation to anything occurring before 6 April 2011, a reference to dependants' unsecured pension or the dependant's unsecured pension fund.

99(1)This paragraph applies in the case of a person who—E+W+S+N.I.

(a)reached the age of 75 on or after 22 June 2010 and before 6 April 2011, and

(b)immediately before 6 April 2011, was entitled to dependants' unsecured pension.

(2)Where the last unsecured pension year began on or after 7 April 2010—

(a)pension death benefit rule 4 in section 167 of FA 2004 has effect in relation to that year as if for “100%” there were substituted “ 120% ”, and

(b)for the purposes of that pension death benefit rule, the amount which, immediately before 6 April 2011, was the basis amount for that year by virtue of paragraph 24 of Schedule 28 to FA 2004 continues, on and after that date, to be the basis amount for that year.

(3)The amendments made by paragraph 19 of this Schedule have effect in relation to drawdown pension years beginning on or after 6 April 2011.

Current alternatively secured pension year to become drawdown pension yearE+W+S+N.I.

100(1)This paragraph applies in the case of a person who, immediately before 6 April 2011, was entitled to dependants' alternatively secured pension.E+W+S+N.I.

(2)Where the last alternatively secured pension year began on or after 7 April 2010, the reference in paragraph 23(1)(a) of Schedule 28 to FA 2004 (drawdown pension year) to the day on which the dependant first becomes entitled to drawdown pension is to be read as a reference to the day on which that alternatively secured pension year began.

(3)Accordingly, any alternatively secured pension year which began on or after 7 April 2010 is to be regarded, on and after 6 April 2011, as a drawdown pension year.

(4)For the purposes of pension death benefit rule 4 in section 167 of FA 2004, the amount which, immediately before 6 April 2011, was the basis amount for that alternatively secured pension year by virtue of paragraph 27 of Schedule 28 to FA 2004 continues, on and after that date, to be the basis amount for that year.

(5)In this paragraph “the last alternatively secured pension year” means the alternatively secured pension year in which 5 April 2011 fell.

Lump sums and lump sum death benefitsE+W+S+N.I.

101The amendments made by paragraphs 24 to 26, 31 and 79(2) and (3) have effect in relation to any lump sum to which a person becomes entitled for the purposes of Part 4 of FA 2004 on or after 6 April 2011.E+W+S+N.I.

102The amendments made by paragraphs 27 to 30, 40, 42(2)(a) and (3), 63, 77(4), 81(2) and (4), 82(3) to (5) and 83 have effect in relation to lump sums paid on or after 6 April 2011.E+W+S+N.I.

103The amendments made by paragraphs 33 to 39, 41, 42(2)(b) and (c), (4) and (5), 65, 67, 68, 75(a), 76, 77(5), 79(4) and 82(6) have effect in relation to deaths occurring on or after 6 April 2011.E+W+S+N.I.

Lifetime allowance chargeE+W+S+N.I.

104(1)The amendments made by paragraphs 43, 44, 73, 80 and 82(2) have effect in relation to benefit crystallisation events occurring on or after 6 April 2011.E+W+S+N.I.

(2)Any reference in a provision within sub-paragraph (3) to an amount previously crystallised on the designation of sums or assets as available for the payment of drawdown pension includes a reference to an amount crystallised before 6 April 2011 on the designation of sums or assets as available for the payment of unsecured pension.

(3)The provisions are—

(a)paragraph 3(2) of Schedule 32 to FA 2004 (benefit crystallisation events 1 and 2: prevention of overlap);

(b)paragraph 4(2) of that Schedule (benefit crystallisation events 1 and 4: prevention of overlap);

(c)paragraph 17(2) of that Schedule (benefit crystallisation event 8: prevention of overlap with other events).

Inheritance taxE+W+S+N.I.

105The amendments made by paragraphs 47 and 50 have effect in relation to dispositions made (or treated as made) on or after 6 April 2011.E+W+S+N.I.

106The amendments made by paragraphs 48 and 51 to 57 have effect in relation to deaths occurring on or after 6 April 2011.E+W+S+N.I.

Consequential repealsE+W+S+N.I.

107Any repeal in paragraph 84 has effect to the same extent as the provision of this Schedule to which the repeal relates.E+W+S+N.I.

Power to make retrospective provision in orders and regulations under Part 4 of FA 2004E+W+S+N.I.

108(1)This paragraph applies to any order or regulations under Part 4 of FA 2004 which—E+W+S+N.I.

(a)are made in the tax year beginning on 6 April 2011, and

(b)are made in consequence of, or for the purposes of, or for giving full effect to, the amendments of that Part made by this Schedule.

(2)Section 282 of that Act (orders and regulations) has effect in relation to any order or regulations to which this paragraph applies as if in subsection (A1) the words “if that provision does not increase any person's liability to tax” were omitted.

Application of rules of pension schemesE+W+S+N.I.

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 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.E+W+S+N.I.

(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 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.

(3)In the case of a personal pension scheme within the meaning of section 1 of 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.