Income and Corporation Taxes Act 1988

645 Earnings from pensionable employment. U.K.

M1 (1) This section applies to an office or employment held by an individual if—

(a) service in it is service to which a relevant superannuation scheme relates; and

(b) the individual is a participant in the scheme; and

(c) [F1 subsection (4) below does not apply] to his participation in the scheme.

(2) This section applies whether or not the duties of the office or employment are performed wholly or partly in the United Kingdom or the individual is chargeable to tax in respect of it.

(3) In subsection (1) above “a relevant superannuation scheme” means a scheme or arrangement—

(a) the object or one of the objects of which is the provision, in respect of persons serving in particular offices or employments, of relevant benefits within the meaning of section 612; F2 . . .

(b) which is established by a person other than the individual [F1 ; F3 . . .

(c) which is of a description mentioned in [F4 section 387(2) of ITEPA 2003 (meaning of non-approved retirement benefits scheme)]][F5 ; and

(d) which is not an approved converted scheme].

(4) This subsection applies to an individual’s participation in a scheme if the scheme provides no benefits in relation to him other than—

(a) an annuity payable to his surviving spouse or a dependant of his;

(b) a lump sum payable on his death in service.

[F6 (4A) Where the [F7 earnings] from an office or employment held by an individual are [F8 earnings and amounts treated as earnings to which subsection (4B) applies], this section shall have effect with the substitution of the following for paragraph (c) of subsection (3) above—

“(c) which corresponds to a scheme of a description mentioned in [F9 section 387(2) of ITEPA 2003 (meaning of non-approved retirement benefits scheme)].”.]

[F10 (4B) This subsection applies to earnings and amounts treated as earnings for a year of assessment if—

(a) the employee or office-holder is not domiciled in the United Kingdom in that year, and

(b) the employment is with a foreign employer.

(4C) If there is a dispute as to whether the employee or office-holder is not domiciled in the United Kingdom, sections 42 and 43 of ITEPA 2003 (Board to determine dispute as to domicile) apply to the dispute as they apply to a dispute mentioned in section 42(1) of that Act.

(4D) In this section—

• “earnings and amounts treated as earnings” means earnings and amounts treated as earnings which constitute employment income (see section 7(2)(a) or (b) of ITEPA 2003);

• “foreign employer” has the meaning given by section 721 of ITEPA 2003.]

(5) This subsection applies to an individual’s participation in a scheme if any sums paid pursuant to the scheme with a view to the provision of relevant benefits for him are treated as his income for the purposes of the Income Tax Acts F11 .

Textual Amendments

F1 1989 s.77and Sch.7 para.6(2), (3)from 6April 1989.Previously

“neither subsection (4) nor subsection (5) below applies”

in subs.(1).

F2 Repealed by 1989 ss.77and 187, Schs.7 para.6(3)and 17 Part IVfrom 6April 1989.

F3 Word preceding s. 645(3)(c) repealed (28.7.2000) by Finance Act 2000 (c, 17), Sch. 13 para. 20(2), Sch. 40 Pt. 2(4) (with Sch. 13 Pt. 2)

F4 Words in s. 645(3)(c) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 93(2) (with Sch. 7)

F5 S. 645(3)(d) and preceding word inserted (28.7.2000) by Finance Act 2000 (c. 17), Sch. 13 para. 20(2) (with Sch. 13 Pt. 2)

F6 1989 s.77and Sch.7 para.6(4)from 6April 1989.

F7 Words in s. 645(4A) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 93(3)(a) (with Sch. 7)

F8 Words in s. 645(4A) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 93(3)(b) (with Sch. 7)

F9 Words in s. 645(4A) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 93(3)(c) (with Sch. 7)

F10 S. 645(4B)-(4D) inserted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 93(4) (with Sch. 7)

F11 Repealed by 1989 ss.77and 187, Schs.7 para.6(5)and 17 Part IVfrom 6April 1989.

Marginal Citations

M1 Source-1987 (No.2) s.36