Finance (No.2) Act 1987

Section 57.

SCHEDULE 2 Personal Pension Schemes Etc.

1 In section 226(13) of the Taxes Act, after “means” there shall be inserted “(a)”, and at the end there shall be added— “and

(b) annuities or lump sums under approved personal pension arrangements within the meaning of Chapter II of Part I of the Finance (No. 2) Act 1987”.

2 (1) In section 332(2) of the Taxes Act (exceptions to registered friendly societies' exemption from income tax and corporation tax), after paragraph (a) and before the word “and” which follows it there shall be inserted—

“(aa) shall not apply to profits arising from pension business,”.

(2) In section 337 of the Taxes Act (interpretation of Chapter III of Part XII of that Act etc.)—

(a) in subsection (2), after the words “the [1974 c. 46.] Friendly Societies Act 1974” there shall be inserted the words “, any pension business”,

(b) paragraph (b) of subsection (2) shall be omitted, and

(c) in subsection (3), after the definition of “tax exempt life or endowment business” there shall be inserted—

• ““pension business” shall be construed in accordance with section 323 above,”.

3 In section 14(1) of the [1973 c. 51.] Finance Act 1973 (lump sum benefits on retirement not chargeable under Schedule E), at the end there shall be added “; or

(c) it is paid under approved personal pension arrangements (within the meaning of Chapter II of Part I of the Finance (No. 2) Act 1987)”.

4 (1) In section 26 of the [1978 c. 42.] Finance Act 1978 (open market option for retirement annuities) in subsection (1), for the words from “may require” to the end there shall be substituted—

“(a) may agree with the person with whom it is made that a sum representing the value of the individual’s accrued rights under it should be applied as the premium or other consideration either under another annuity contract made between them and approved by the Board under section 226 of the Taxes Act, or under personal pension arrangements made between them and approved by the Board under Chapter II of Part I of the Finance (No. 2) Act 1987, or

(b) may require the person with whom it is made to pay such a sum to such other person as the individual may specify, to be applied by that other person as the premium or other consideration either under an annuity contract made between the individual and him and approved by the Board under section 226 of the Taxes Act, or under personal pension arrangements made between the individual and him and approved by the Board under Chapter II of Part I of the Finance (No. 2) Act 1987.”.

(2) This paragraph shall be deemed to have come into force on 6th April 1987.

5 In section 45(2) of the [1984 c. 43.] Finance Act 1984, after paragraph (c) there shall be added—

“(d) subsections (1) and (2) of section 39 of the Finance (No. 2) Act 1987”.

6 In paragraph 1 of Schedule 11 to the Finance Act 1984 (treatment of lettings as a trade for the purposes of certain provisions), at the end of sub-paragraph (2) there shall be added—

“(k) subsection (2)(c) of section 35 of the Finance (No. 2) Act 1987 (personal pension schemes).”.