The Taxation of Pension Schemes (Transitional Provisions) Order 2006

Individuals over the age of 75 and alternatively secured pension funds

31.—(1) In the case of an individual who meets the conditions set out in paragraph (2), paragraph (3) applies.

(2) The conditions are as follows.

• Condition A

  The individual had reached the age of 75 before 6th April 2006.

• Condition B

  The individual is a member of a scheme which falls within paragraphs 1(1)(a) to (d) of Schedule 36.

• Condition C

  The individual has a prospective right to receive a pension under that scheme on 5th April 2006.

(3) Paragraph 11 of Schedule 28 (member’s alternatively secured pension fund)(1) is modified as follows—

(a) in sub-paragraph (1)(a) for “Condition A or Condition B” substitute “Condition A, Condition B or Condition C”.

(b) after sub-paragraph (3) add—

“(3A) Condition C is that immediately before the 6th April 2006 —

(a) the sums and assets were part of the member’s pension fund which fell within sub-paragraphs 1(1)(a) to (d) of Schedule 36;

(b) the member had a prospective right to receive a pension under that scheme, and

(c) the member’s pension fund was a money purchase arrangement that was not a cash balance arrangement immediately before 6th April 2006.”.

(4) In the case of an individual who meets the conditions set out in paragraph (5), paragraph (6) applies.

(5) The conditions are as follows.

• Condition A

  The individual had reached the age of 75 before 6th April 2006.

• Condition B

  The individual is a member of a scheme which falls within sub-paragraph 1(1)(a) of Schedule 36.

• Condition C

  On 5^th April 2006, the individual was entitled to a pension which—

  (a)

  was paid from the resources of—

  (i)

  a small self-administered scheme as defined in regulation 2 of the Retirement Benefits Schemes (Restriction on Discretion to Approve) (Small self-administered Schemes) Regulations 1991, or

  (ii)

  a small self-administered scheme that had been approved under section 590 of ICTA,

  and the rules of the scheme on 5th April 2006 did not require the purchase of an annuity in respect of the individual; and

  (b)

  is not provided under a defined benefits arrangement.

(6) Paragraph 11 of Schedule 28 (member’s alternatively secured pension fund)(2) shall be modified as follows—

(a) after the words “held for the purposes of the arrangement as” add the words “meet condition A, B or C.”.

(b) omit sub-paragraphs (1)(a) and (b).

(c) after sub-paragraph (3) add—

“(3A) Condition C is that immediately before the 6th April 2006 —

(a) the sums and assets were part of the member’s pension fund which fell within sub-paragraph 1(1)(a) of Schedule 36; and

(b) the member was drawing a pension payable from the resources of—

(i) a small self-administered scheme as defined in the Retirement Benefits Schemes (Restriction on Discretion to Approve) (Small Self-administered Schemes) Regulations 1991, or

(ii) a small self-administered scheme that had been approved under section 590 of ICTA,

and the rules of scheme on 5th April 2006 did not require the purchase of an annuity in respect of the member.”.

(1)

Paragraph 11 to Schedule 28 of the Finance Act 2004 was amended by paragraph 20 of Schedule 10 to the Finance Act 2005

(2)

Paragraph 11 to Schedule 28 of the Finance Act 2004 was amended by paragraph 20 of Schedule 10 to the Finance Act 2005.