17(1)In Part 2 of Schedule 28 to FA 2004, paragraph 23 (unsecured pension year) is amended as follows.U.K.
(2)In sub-paragraph (1)—
(a)for “ “Unsecured pension year”” substitute “ “Drawdown pension year” ”;
(b)in paragraph (a), for “dependants' unsecured pension” substitute “dependants' drawdown pension”;
(c)at the end insert—
“This is subject to paragraph 24B.”
(3)For sub-paragraph (2) substitute—
“(2)The drawdown pension year in which the dependant dies is the last drawdown pension year and ends immediately before the dependant's death.”
(4)The heading before paragraph 23 becomes “ Drawdown pension year and basis amount for drawdown pension year ”.
18(1)Paragraph 24 of that Schedule (basis amount) is amended as follows.U.K.
(2)For sub-paragraph (1) substitute—
“(A1)This paragraph applies in relation to drawdown pension years beginning on or before the dependant's 75th birthday.
(1)Subject as follows, the period of three drawdown pension years beginning with the first drawdown pension year, and each succeeding period of three drawdown pension years, is a “reference period”.
(1ZA)But the reference period in which the dependant reaches the age of 75 ends with the drawdown pension year in which the dependant reaches that age.”
(3)In sub-paragraph (1B)(b)—
(a)after “subject to” insert “ sub-paragraph (1ZA) and ”;
(b)for “five unsecured pension years” (in both places) substitute “ three drawdown pension years ”.
(4)In sub-paragraphs (2) and (4)—
(a)for “unsecured pension year” substitute “ drawdown pension year ”;
(b)for “dependant's unsecured pension fund” substitute “ dependant's drawdown pension fund ”.
(5)In sub-paragraph (5)—
(a)for “an unsecured pension year” substitute “ a drawdown pension year ”;
(b)for “that unsecured pension year” substitute “ that drawdown pension year ”.
(6)In sub-paragraph (6)—
(a)for “unsecured pension year” substitute “ drawdown pension year ”;
(b)for “dependant's unsecured pension fund” substitute “ dependant's drawdown pension fund ”.
(7)After sub-paragraph (6) insert—
“(6A)But sub-paragraph (5) does not apply where the operation of that sub-paragraph in relation to an additional fund designation during a drawdown pension year would reduce the basis amount for that drawdown pension year.”
(8)In sub-paragraph (7), for “dependant's unsecured pension fund” substitute “ dependant's drawdown pension fund ”.
(9)In sub-paragraph (8)—
(a)for “sums and assets” substitute “ sums or assets ”;
(b)for “unsecured dependants' pension” substitute “dependants' drawdown pension”.
(10)In sub-paragraph (8A), for “dependant's unsecured pension fund” substitute “ dependant's drawdown pension fund ”.
(11)In sub-paragraph (9)(b), for “unsecured pension year” substitute “ drawdown pension year ”.
F1(12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F1Sch. 16 para. 18(12) omitted (6.4.2015) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 32(2)(4)
19U.K.After paragraph 24 of that Schedule insert—
“24A(1)This paragraph applies in relation to drawdown pension years beginning after the dependant's 75th birthday.
(2)For each drawdown pension year beginning after the dependant reached the age of 75, the basis amount is the annual amount of the relevant annuity which could have been purchased by the application of the sums and assets representing the dependant's drawdown pension fund on the nominated date.
(3)“The nominated date” is such day within the period of 60 days ending with the first day of the drawdown pension year as is nominated by the scheme administrator (or, if no day is nominated by the scheme administrator, is the first day of that year).
(4)On the occasion of each additional fund designation during a drawdown pension year, the basis amount of that drawdown pension year is to be recalculated in accordance with sub-paragraph (5).
(5)The basis amount for the drawdown pension year is the annual amount of the relevant annuity which could have been purchased by the application of the sums and assets representing the dependant's drawdown pension fund immediately after the additional fund designation.
(6)But sub-paragraph (4) does not apply where the operation of that sub-paragraph in relation to an additional fund designation during a drawdown pension year would reduce the basis amount for that drawdown pension year.
(7)“Additional fund designation” has the meaning given by paragraph 24(8).
(8)Paragraph 14 defines “relevant annuity”.
(9)Nothing in this paragraph applies in respect of an arrangement to which section 167(2A) applies.
24B(1)This paragraph applies if the dependant has reached the age of 75.
(2)Sub-paragraph (3) applies if, at any time during a drawdown pension year in respect of an arrangement (“the current drawdown pension year”), the dependant notifies the scheme administrator that the dependant wishes the drawdown pension year following the current drawdown pension year to begin on the day on which the next drawdown pension year in respect of another arrangement relating to the dependant under the pension scheme (including any arrangement relating to that person as a member of the scheme) will begin.
(3)The scheme administrator may determine—
(a)that the current drawdown pension year is to end immediately before that day, and
(b)that the period of 12 months beginning with that day, and each succeeding period of 12 months, is a drawdown pension year in respect of the arrangement.
(4)The scheme administrator may not make a determination under this paragraph more than once in relation to the same arrangement.”