The Pensions Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006

Modification of Schedule 34

17.  In Schedule 34 after paragraph 19 add—

“Revenue and Customs discretion

19A.— (1) Sub-paragraph (2) applies to—

(a) the member payment provisions to a payment made (or treated by this Part as made) to or in respect of—

(i) a relieved member of a relevant non-UK scheme, or

(ii) a transfer member of such a scheme;

(b) the annual allowance provisions in relation to an individual who is a currently-relieved member of a currently-relieved non-UK scheme; and

(c) the lifetime allowance provision charge in relation to an individual who is a relieved member of a relieved non-UK pension scheme.

(2) If it appears to an officer of Revenue and Customs that, by reason of some non-compliance with the requirements set out in this Part, which in the officer’s view does not materially affect the nature of a payment, the payment, or the member in respect of whom it is payable, would be treated less favourably by the strict application of the provisions mentioned in paragraph (1) than in the officer’s view is appropriate, sub-paragraph (3) applies.

(3) If this sub-paragraph applies, an officer of Revenue and Customs—

(a) may decide, and

(b) if requested to do so by a member falling within any of the descriptions in paragraphs (a) to (c) of sub-paragraph (1), shall decide,

whether, notwithstanding the non-compliance referred to in sub-paragraph (2), the treatment which, but for that non-compliance, would have applied under this Part should apply to the payment or the member (as the case may be).

This is subject to the qualification in sub-paragraph (4).

(4) An officer of Revenue and Customs shall not make a decision under sub-paragraph (3) that, notwithstanding the difference referred to in sub-paragraph (2), the provisions of this Part shall apply to the payment or the member unless—

(a) it appears to the officer that the effect of the decision would be to reduce the total cumulative tax liability in respect of the charges mentioned in subparagraph (1) of the member whose tax liability would be affected by it, taking one year with another;

(b) the officer has first given at least 28 days' notice of his intention to make the decision to the member whose tax liability would by affected by it; and

(c) the member has—

(i) consented to the making of the decision; or

(ii) failed to respond to the notice within the period specified in paragraph (b).

(5) If an officer of Revenue and Customs decides under sub-paragraph (3) that—

(a) the conditions for the exercise of his discretion under that paragraph are not met; or

(b) the conditions for its exercise are met, but that it is otherwise inappropriate for him to exercise it in favour of the member,

the member may appeal against the decision.

(6) Subsections (3) to (5) of section 170 apply for the purposes of a decision by an officer of Revenue and Customs under sub-paragraph (3) as they apply to a decision under section 169(5).

(7) The Commissioners before whom an appeal under paragraph (5) is brought must consider—

(a) whether the conditions for the exercise of the discretion of an officer of Revenue and Customs have been met; and

(b) if they are satisfied that those conditions have been met, whether the discretion ought to have been exercised in favour of the member.

(8) If they decide that the conditions for the exercise of that discretion have not been met, they must dismiss the appeal.

(9) If they decide that the conditions for the exercise of that discretion have been met, they must decide whether the discretion ought to have been exercised in favour of the member.

(10) If they decide that although the conditions are met, the discretion ought not to have been exercised in favour of the member, they must dismiss the appeal.

(11) If they decide that the discretion ought to have been exercised in favour of the member they may so decide and the provisions of this Part shall apply accordingly to the member or the payment in question (as the case may be).

(12) A decision under sub-paragraph (8) or (10) is final but subject to any further appeal or any determination on, or in consequence of, a case stated.”.