Finance Act 2005, Paragraph 40 is up to date with all changes known to be in force on or before 06 March 2025. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
40U.K.After section 246 insert—
(1)An employer's expenses of providing relevant benefits to or in respect of a present or former employee (“the employee”) under an employer-financed retirement benefits scheme (whether or not by the making of contributions under the scheme) are not subject to relief if subsection (2) applies.
(2)This subsection applies where—
(a)the provision of the relevant benefits results in a reduction in the benefits payable to or in respect of the employee under a registered pension scheme, or
(b)a reduction in the benefits payable to or in respect of the employee under a registered pension scheme results in the provision of the relevant benefits.
(3)But if the extent to which contributions paid by the employer under the registered pension scheme in respect of the employee are subject to relief has been restricted in accordance with regulations under section 196A, the employer's expenses of providing the relevant benefits are not prevented from being subject to relief to the extent that is just and reasonable.
(4)The references in this section to expenses of an employer being subject to relief are to—
(a)their being deductible in computing the amount of the profits of the employer for the purposes of Part 2 of ITTOIA 2005 (trading income) or Case I or II of Schedule D,
(b)their being expenses of management of the employer for the purposes of section 75 of ICTA (expenses of management: companies with investment business), or
(c)their being brought into account at Step 1 in section 76(7) of ICTA (expenses of insurance companies) in respect of the employer,
(depending on which is appropriate in relation to the employer).
(5)In this section—
“employer-financed retirement benefits scheme”, and
“relevant benefits”,
have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections 393A and 393B of that Act).”
Commencement Information
I1Sch. 10 para. 40 in force at 6.4.2006, see Sch. 10 para. 64(1)
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