Income and Corporation Taxes Act 1988

[F1 636A Income withdrawals after death of member. U.K.

(1) Where a person entitled to such an annuity as is mentioned in section 636 elects to defer the purchase of the annuity, income withdrawals may be made by him during the period of deferral, subject as follows.

[F2 (1A) The Board shall not refuse to approve a personal pension scheme by reason only that it makes provision for arrangements under the scheme which enable a person who makes such an election as is mentioned in subsection (1) above to apply different parts of the personal pension fund at different times in the purchase of different annuities satisfying the conditions in section 636 (whether commencing on the same day or on different days).]

(2) No such deferral may be made, and accordingly income withdrawals may not be made, if the person concerned elects in accordance with section 636(5)(a) to defer the purchase of an annuity.

(3) Income withdrawals must not be made after the person concerned if he had purchased such an annuity as is mentioned in section 636 would have ceased to be entitled to payments under it.

(4) Income withdrawals must not in any event be made after the member would have attained the age of 75 or, if earlier, after the person concerned attains the age of 75.

(5) The aggregate amount of income withdrawals by a person in each successive period of twelve months beginning with the date of the member’s death must be not less than 35 per cent. or more than 100 per cent. of the annual amount of the annuity which would have been purchasable by him—

[F3 (a) in the case of the first period of three years, on the relevant reference date; and

(b) in the case of any succeeding period of three years,

[F4 (i)] on a particular day in the period of sixty days ending with the relevant reference date[F5 , or

(ii) immediately after the last qualifying annuitisation,

whichever is the later]].

[F6 (5A) For the purposes of subsection (5) above—

(a) “annuitisation” means the application of part of the personal pension fund in the purchase of an annuity satisfying the conditions in section 636; and

(b) an annuitisation is a “qualifying annuitisation”, in relation to any such period of twelve months as is mentioned in subsection (5) above, if it has taken place—

(i) in an earlier such period, but

(ii) since the relevant reference date.]

(6) For the purposes of this section the relevant reference date for the first three years is the date of the member’s death, and for each succeeding period of three years is the first day of that period.

(7) The right to income withdrawals must not be capable of assignment or surrender [F7 , except for the purpose of giving effect to a pension sharing order or provision].]

Textual Amendments

F1 S. 636A inserted (1.5.1995) by Finance Act 1995 (c. 4), Sch. 11 para. 7

F2 S. 636A(1A) inserted (6.4.2001) by Finance Act 2000 (c. 17), Sch. 13 para. 12(2)(7) (with Sch. 13 Pt. 2)

F3 S. 636A(5)(a)(b) substituted for words in s. 636A(5) (1.10.2000) by Finance Act 2000 (c. 17), Sch. 13 para. 12(3)(6) (with Sch. 13 Pt. 2)

F4 Words in s. 636A(5)(b) renumbered as s. 636A(5)(b)(i) (6.4.2001) by virtue of Finance Act 2000 (c. 17), Sch. 13 para. 12(4)(a)(7) (with Sch. 13 Pt. 2)

F5 Words in s. 636A(5)(b) added (6.4.2001) by Finance Act 2000 (c. 17), Sch. 13 para. 12(4)(b)(7) (with Sch. 13 Pt. 2)

F6 S. 636A(5A) inserted (6.4.2001) by Finance Act 2000 (c. 17), Sch. 13 para. 12(5)(7) (with Sch. 13 Pt. 2)

F7 Words in s. 636A(7) inserted (with application in accordance with Sch. 10 para. 18(8)(9) of the amending Act) by Finance Act 1999 (c. 16), Sch. 10 para. 14; S.I. 2000/1093, art. 2