PART XIV PENSION SCHEMES, SOCIAL SECURITY BENEFITS, LIFE ANNUITIES ETC.
CHAPTER I RETIREMENT BENEFIT SCHEMES
Approval of schemes
590 Conditions for approval of retirement benefit schemes.
F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2590A Section 590: supplementary provisions.
F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F4590B Section 590: further supplementary provisions.
F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6590C Earnings cap.
F7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
591 Discretionary approval.
F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F9591A Effect on approved schemes of regulations under section 591.
F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F11591B Cessation of approval: general provisions.
F12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F13591C Cessation of approval: tax on certain schemes.
F14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
591D Section 591C: supplementary.
F15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax reliefs
592 Exempt approved schemes.
F16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
593 Relief by way of deductions from contributions.
F17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
594 Exempt statutory schemes.
F18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge to tax in certain cases
595 Charge to tax in respect of certain sums paid by employer etc.
F19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
596 Exceptions from section 595.
F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F21596A Charge to tax: benefits under non-approved schemes.
F22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F23596B Section 596A: supplementary provisions.
F24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F25596C Notional interest treated as paid if amount charged in respect of beneficial loan.
F26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
597 Charge to tax: pensions.
F27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
598 Charge to tax: repayment of employee’s contributions.
F28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
599 Charge to tax: commutation of entire pension in special circumstances.
F29. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F30599A Charge to tax: payments out of surplus funds.
F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
600 Charge to tax: unauthorised payments to or for employees.
F32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
601 Charge to tax: payments to employers.
F33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
602 Regulations relating to pension fund surpluses.
F34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
603 Reduction of surpluses.
F35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplementary provisions
604 Application for approval of a scheme.
F36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
605 Information.
F37. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F38605A False statements etc.
F39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
606 Default of administrator etc.
F40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F41606A Recourse to scheme members.
F42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
607 Pilots’ benefit fund.
F43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
608 Superannuation funds approved before 6th April 1980.
F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
609 Schemes approved before 23rd July 1987.
F45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
610 Amendments of schemes.
F46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
611 Definition of “retirement benefits scheme”.
F47. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F48611A Definition of relevant statutory scheme.
F49. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F50611AA Definition of the administrator.
F51. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
611A Definition of relevant statutory scheme.
F49. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
612 Other interpretative provisions, and regulations for purposes of this Chapter.
F52. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHAPTER II OTHER PENSION FUNDS AND SOCIAL SECURITY BENEFITS AND CONTRIBUTIONS
613 Parliamentary pension funds.
F53(1)
M1The salary of a Member of the House of Commons shall, for all the purposes of the Income Tax Acts, be treated as reduced by the amounts deducted in pursuance of section 1 of the M2House of Commons Members’ Fund Act 1939; but a Member shall not by reason of any such deduction be entitled to relief under any other provision of the Income Tax Acts.
(2)
In subsection (1) above the reference to salary shall be construed as mentioned in subsection (3) of section 1 of the House of Commons Members’ Fund Act 1939, the reference to amounts deducted includes a reference to amounts required to be set aside under that subsection, and “deduction” shall be construed accordingly.
(3)
F54. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)
M3The F55. . . trustees of—
(a)
the House of Commons Members’ Fund established under section 1 of that Act of 1939;
(b)
F56. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c)
F56. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d)
F56. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A claim under this subsection shall be made to the Board.
614 Exemptions and reliefs in respect of income from investments etc. of certain pension schemes.
(1)
F59. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2)
M4Any interest or dividends received by the person in whom is vested any of the Family Pension Funds mentioned in section 273 of the M5Government of India Act 1935, and having effect as a scheme made under section 2 of the M6Overseas Pensions Act 1973, on sums forming part of that fund shall be exempt from income tax.
F60(2A)
The reference in subsection (2) above to interest on sums forming part of a fund include references to any amount which is treated as income by virtue of F61Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities) and derives from any investment forming part of that fund.
(3)
M7Income derived from investments or deposits of any fund referred to in F62section 648, 649, 650 or 651 of ITEPA 2003 shall not be charged to income tax, and any income tax deducted from any such income shall be repaid by the Board to the persons entitled to receive the income.
(4)
M8In respect of income derived from investments or deposits of the Overseas Service Pensions Fund established pursuant to section 7(1) of the M9Overseas Aid Act 1966, the Board shall give by way of repayment such relief from income tax as is necessary to secure that the income is exempt to the like extent (if any) as if it were income of a person not domiciled, ordinarily resident or resident in the United Kingdom.
(5)
M10In respect of dividends and other income derived from investments, deposits or other property of a superannuation fund to which section 615(3) applies the Board shall give by way of repayment such relief from income tax as is necessary to secure that the income is exempt to the like extent (if any) as if it were income of a person not domiciled, ordinarily resident or resident in the United Kingdom.
(6)
M11A claim under this section shall be made to the Board.
615 Exemption from tax in respect of certain pensions.
(1)
F63. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2)
F63. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)
M12Where an annuity is paid from a superannuation fund to which this subsection applies to a person who is not resident in the United Kingdom, income tax shall not be deducted from any payment of the annuity or accounted for under section 349(1) by the trustees or other persons having the control of the fund.
(4)
F63. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)
F63. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6)
M13Subsection (3) above applies to any superannuation fund which—
(a)
is bona fide established under irrevocable trusts in connection with some trade or undertaking carried on wholly or partly outside the United Kingdom;
(b)
has for its sole purpose F64(subject to any enactment or Northern Ireland legislation requiring or allowing provision for the value of any rights to be transferred between schemes or between members of the same scheme) the provision of superannuation benefits in respect of persons’ employment in the trade or undertaking wholly outside the United Kingdom; and
(c)
is recognised by the employer and employed persons in the trade or undertaking;
and for the purposes of this subsection duties performed in the United Kingdom the performance of which is merely incidental to the performance of other duties outside the United Kingdom shall be treated as performed outside the United Kingdom.
(7)
M14In this section—
“pension” includes a gratuity or any sum payable on or in respect of death or, in the case of a pension falling within subsection (2)(g) above, ill-health, and a return of contributions with or without interest thereon or any other addition thereto;
“overseas territory” means any territory or country outside the United Kingdom;
“the Pensions (Increase) Acts” means the M15Pensions (Increase) Act 1971 and any Act passed after that Act for purposes corresponding to the purposes of that Act;
“United Kingdom trust territory” means a territory administered by the government of the United Kingdom under the trusteeship system of the United Nations.
(8)
F63. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F65(9)
For the purposes of this section, a person shall be taken to be employed in the public service of an overseas territory at any time when—
(a)
he is employed in any capacity under the government of that territory, or under any municipal or other local authority in it,
(b)
he is employed, in circumstances not falling within paragraph (a) above, by a body corporate established for any public purpose in that territory by an enactment of a legislature empowered to make laws for that territory, or
(c)
he is the holder of a public office in that territory in circumstances not falling within either paragraph (a) or (b).
(10)
For the purposes of subsection (9), references to the government of an overseas territory include references to a government constituted for two or more overseas territories, and to any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more such territories.
616 Other overseas pensions.
F66. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
617 Social security benefits and contributions.
(1)
F67. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2)
F67. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)
M16Subject to F68subsections (4) and (5) below, no relief or deduction shall be given or allowed F69for corporation tax purposes in respect of any contribution paid by any person under—
(a)
Part I of the Social Security F70Contributions and Benefits Act 1992, or
(b)
Part I of the Social Security F71Contributions and Benefits (Northern Ireland) Act 1992.
F72(4)
Subsection (3) above shall not apply to a contribution if it is a secondary Class 1 contribution F73, a Class 1A contribution or a Class 1B contribution (within the meaning of Part I of either of those Acts) and is allowable—
(a)
as a deduction in computing profits or gains;
(b)
(c)
as expenses of management or supervision deductible under section 121;
(e)
F77. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F78(5)
Subsection (3) above shall not apply for the purposes of deductions under Chapter 2 of Part 5 of ITEPA 2003 (in relation to which section 360A of that Act applies).
(5)
F79. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6)
F80. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F81617A Tax credits under Part 1 of Tax Credits Act 2002
F82. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHAPTER III RETIREMENT ANNUITIES
618 Termination of relief under this Chapter, and transitional provisions.
F83. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
619 Exemption from tax in respect of qualifying premiums.
F84. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
620 Qualifying premiums.
F85. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
621 Other approved contracts.
F86. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
622 Substituted retirement annuity contracts.
F87. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
623 Relevant earnings.
F88. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
624 Sponsored superannuation schemes and controlling directors.
F89. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
625 Carry-forward of unused relief under section 619.
F90. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
626 Modification of section 619 in relation to persons over 50.
F91. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F92627 Lloyd’s underwriters.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
628 Partnership retirement annuities.
F93. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
629 Annuity premiums of Ministers and other officers.
M17(1)
For the purposes of this Chapter so much of any salary which—
(a)
is payable to the holder of a qualifying office who is also a Member of the House of Commons, and
(b)
is payable for a period in respect of which the holder is not a participant in relation to that office in arrangements contained in the Parliamentary pension scheme but is a participant in relation to his membership of the House of Commons in any such arrangements, or for any part of such a period,
as is equal to the difference between a Member’s pensionable salary and the salary which (in accordance with any such resolution as is mentioned in subsection (3)(a) below) is payable to him as a Member holding that qualifying office shall be treated as remuneration from the office of Member and not from the qualifying office.
(2)
In this section—
“Member’s pensionable salary” means a Member’s ordinary salary under any resolution of the House of Commons which, being framed otherwise than as an expression of opinion, is for the time being in force relating to the remuneration of Members or, if the resolution provides for a Member’s ordinary salary thereunder to be treated for pension purposes as being at a higher rate, a notional yearly salary at that higher rate;
“qualifying office” means an office mentioned in section 2(2)(b), (c) or (d) of the Parliamentary and other M18Pensions Act 1987;
“the Parliamentary pension scheme” has the same meaning as in that Act;
and without prejudice to the power conferred by virtue of paragraph 13 of Schedule 1 to that Act, regulations under section 2 of that Act may make provision specifying the circumstances in which a person is to be regarded for the purposes of this section as being or not being a participant in relation to his Membership of the House of Commons, or in relation to any office, in arrangements contained in the Parliamentary pension scheme.
(3)
In subsection (2) above “a Member’s ordinary salary”, in relation to any resolution of the House of Commons, means—
(a)
if the resolution provides for salary to be paid to Members at different rates according to whether or not they are holders of particular offices, or are in receipt of salaries or pensions as the holders or former holders of particular offices, a Member’s yearly salary at the higher or highest rate; and
(b)
in any other case, a Member’s yearly salary at the rate specified in or determined under the resolution.
CHAPTER IV PERSONAL PENSION SCHEMES
Preliminary
630 Interpretation.
F94. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
631 Approval of schemes.
F95. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F96631A Conversion of certain approved retirement benefits schemes.
F97. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restrictions on approval
632 Establishment of schemes.
F98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F99632A Eligibility to make contributions.
F100. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
632B Eligibility to make contributions: concurrent membership.
F101. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
633 Scope of benefits.
F102. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
634 Annuity to member.
F103. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F104634A Income withdrawals by member.
F105. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
635 Lump sum to member.
F106. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
636 Annuity after death of member.
F107. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F108636A Income withdrawals after death of member.
F109. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
637 Death benefit.
F110. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F111637A Return of contributions on or after death of member.
F112. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
638 Other restrictions on approval.
F113. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F114638ZA Personal pension arrangements with more than one pension date etc.
F115. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F116638A Power to prescribe restrictions on approval.
F117. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax reliefs
639 Member’s contributions.
F118. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
640 Maximum amount of deductions.
F119. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F120640A Earnings cap.
F121. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
641 Carry-back of contributions.
F122. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F123641A Election for contributions to be treated as paid in previous year.
F124. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
642 Carry-forward of relief.
F125. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
643 Employer’s contributions and personal pension income etc.
F126. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
644 Meaning of “relevant earnings”.
F127. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
645 Earnings from pensionable employment.
F128. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
646 Meaning of “net relevant earnings”.
F129. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F130646A Earnings from associated employments.
F131. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F132646B Presumption of same level of relevant earnings etc for 5 years.
F133. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
646C Provisions supplementary to section 646B.
F134. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F135646D Higher level contributions after cessation of actual relevant earnings: modification of section 646B.
F136. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge to tax
647 Unauthorised payments.
F137. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
648 Contributions under unapproved arrangements.
F138. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
648A Annuities: charge under Schedule E.
F141. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F142648B Return of contributions after pension date.
F143. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Miscellaneous
649 Minimum contributions under Social Security Act 1986.
F144. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
650 Withdrawal of approval.
F145. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F146650A Charge on withdrawal of approval from arrangements.
F147. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
651 Appeals.
F148. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F149651A Information powers.
F150. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
652 Information about payments.
F151. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
653 Information: penalties.
F152. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F153653A Notices to be given to scheme administrator.
F154. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
654 Remuneration of Ministers and other officers.
F155. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
655 Transitional provisions.
F156. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHAPTER V PURCHASED LIFE ANNUITIES
656 Purchased life annuities other than retirement annuities.
(1)
M19Subject to section 657, a purchased life annuity shall, for the purposes of the provisions of the F157Corporation Tax Acts relating to tax on annuities and other annual payments, be treated as containing a capital element and, to the extent of the capital element, as not being an annual payment or in the nature of an annual payment; but the capital element in such an annuity shall be taken into account in computing profits or gains or losses for F158other corporation tax purposes in any circumstances in which a lump sum payment would be taken into account.
(2)
M20Where, in the case of any purchased life annuity to which this section applies, the amount of any annuity payment (but not the term of the annuity) depends on any contingency other than the duration of a human life or lives—
(a)
the capital element shall be determined by reference—
(i)
to the amount or value of the payments made or other consideration given for the grant of the annuity (“the purchase price”); and
(ii)
to the expected term of the annuity, as at the date when the first annuity payment began to accrue, expressed in years (and any odd fraction of a year), and determined by reference to the prescribed tables of mortality;
and in head (ii) above “term” means the period from the date when the first annuity payment begins to accrue to the date when the last payment becomes payable;
(b)
the capital element in any annuity payment made in respect of a period of 12 months shall be a fraction—
of the purchase price, where E is the expected term referred to in paragraph (a)(ii) above;
(c)
the capital element in any annuity payment made in respect of a period of less than, or more than, 12 months shall be the amount at (b) above reduced or, as the case may be, increased, in the same proportion as the length of that period bears to a period of 12 months;
(d)
subsection (3) below shall not apply but paragraphs (a) and (b) of subsection (4) below shall apply as they apply to that subsection.
(3)
Subject to subsection (2) above, in the case of any purchased life annuity to which this section applies—
(a)
M21the capital element shall be determined by reference to the amount or value of the payments made or other consideration given for the grant of the annuity; and
(b)
the proportion which the capital element in any annuity payment bears to the total amount of that payment shall be constant for all payments on account of the annuity; and
(c)
where neither the term of the annuity nor the amount of any annuity payment depends on any contingency other than the duration of a human life or lives, that proportion shall be the same proportion which the total amount or value of the consideration for the grant of the annuity bears to the actuarial value of the annuity payments as determined in accordance with subsection (4) below; and
(d)
M22where either the term of the annuity or the amount of any annuity payment (but not both) depends on any contingency other than the duration of a human life or lives, that proportion shall be such as may be just, having regard to paragraph (c) above and to the contingencies affecting the annuity; and
(e)
where both the term of the annuity and the amount of any annuity payment depend on any contingency other than the duration of a human life or lives, that proportion shall be such as may be just, having regard to subsection (2) above and to the contingencies affecting the annuity.
(4)
M23For the purposes of subsection (3) above—
(a)
any entire consideration given for the grant of an annuity and for some other matter shall be apportioned as appears just (but so that a right to a return of premiums or other consideration for an annuity shall not be treated for this purpose as a distinct matter from the annuity);
(b)
where it appears that the amount or value of the consideration purporting to be given for the grant of an annuity has affected, or has been affected by, the consideration given for some other matter, the aggregate amount or value of those considerations shall be treated as one entire consideration given for both and shall be apportioned under paragraph (a) above accordingly; and
(c)
the actuarial value of any annuity payments shall be taken to be their value as at the date when the first of those payments begins to accrue, that value being determined by reference to the prescribed tables of mortality and without discounting any payment for the time to elapse between that date and the date it is to be made.
(5)
Where a person making a payment on account of any life annuity has been notified in the prescribed manner of any decision as to its being or not being a purchased life annuity to which this section applies or as to the amount of the capital element (if any), and has not been notified of any alteration of that decision, the notice shall be conclusive as to those matters for the purpose of determining the amount of income tax which F159the person is entitled or required to deduct from the payment, or for which F159the person is chargeable in respect of it.
(6)
Where a person making a payment on account of a purchased life annuity to which this section applies has not been notified in the prescribed manner of the amount of the capital element, the amount of income tax which F159the person is entitled or required to deduct from the payment, or for which F159the person is chargeable in respect of it, shall be the same as if the annuity were not a purchased life annuity to which this section applies.
F160(7)
In using the prescribed tables of mortality to determine—
(a)
the expected term of an annuity for the purposes of subsection (2)(a) above, or
(b)
the actuarial value of any annuity payments for the purposes of subsection (4)(c) above,
the age, as at the date when the first of the annuity payments begins to accrue, of a person during whose life the annuity is payable shall be taken to be the number of years of his age at his last birthday preceding that date.
(8)
In any case where it is not possible to determine the expected term of an annuity for the purposes of subsection (2)(a) above by reference to the prescribed tables of mortality, that term shall for those purposes be such period as may be certified by the Government Actuary or the Deputy Government Actuary.
(9)
In any case where it is not possible to determine the actuarial value of any annuity payments for the purposes of subsection (4)(c) above by reference to the prescribed tables of mortality, that value shall for those purposes be such amount as may be certified by the Government Actuary or the Deputy Government Actuary.
657 Purchased life annuities to which section 656 applies.
M24(1)
For the purposes of section 656—
“life annuity” means an annuity payable for a term ending with (or at a time ascertainable only by reference to) the end of a human life, whether or not there is provision for the annuity to end during the life on the expiration of a fixed term or on the happening of any event or otherwise, or to continue after the end of the life in particular circumstances; and
“purchased life annuity” means a life annuity granted for consideration in money or money’s worth in the ordinary course of a business of granting annuities on human life.
(2)
Section 656 does not apply—
(a)
to any annuity which would, apart from that section, be treated for the purposes of the provisions of the F161Corporation Tax Acts relating to tax on annuities and other annual payments as consisting to any extent in the payment or repayment of a capital sum;
(b)
to any annuity where the whole or part of the consideration for the grant of the annuity consisted of sums satisfying the conditions for relief under section F162266 or 273;
(c)
to any annuity purchased in pursuance of any direction in a will, or to provide for an annuity payable by virtue of a will or settlement out of income of property disposed of by the will or settlement (whether with or without resort to capital);
F163(d)
to any annuity under, or purchased with sums or assets held for the purposes of, a registered pension scheme; or
(e)
to any annuity purchased by any person in recognition of another’s services (or past services) in any office or employment.
658 Supplementary.
M25(1)
Any question whether an annuity is a purchased life annuity to which section 656 applies, or what is the capital element in such an annuity, shall be determined by the inspector; but a person aggrieved by the inspector’s decision on any such question may appeal within the prescribed time to the Special Commissioners.
(2)
Save as otherwise provided in this Chapter, the procedure to be adopted in giving effect to this Chapter shall be such as may be prescribed.
(3)
The Board may make regulations for prescribing anything which is to be prescribed under this Chapter, and the regulations may apply for the purposes of this Chapter or of the regulations any provision of the Income Tax Acts, with or without modifications.
(4)
Regulations under subsection (3) above may in particular make provision as to the time limit for making any claim for relief from or repayment of tax under this Chapter and as to all or any of the following matters, that is to say—
(a)
as to the information to be furnished in connection with the determination of any question whether an annuity is a purchased life annuity to which section 656 applies or what is the capital element in an annuity, and as to the persons who may be required to furnish any such information;
(b)
as to the manner of giving effect to the decision on any such question, and (notwithstanding anything in section 348) as to the making of assessments for the purpose on the person entitled to the annuity; and
(c)
as to the extent to which the decision on any such question is to be binding, and the circumstances in which it may be reviewed.
(5)
F167(6)
It does not matter for whom that relief or repayment is to be obtained.
CHAPTER VI MISCELLANEOUS
F168658A Charges and assessments on administrators.
F169. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F170659 Financial futures and traded options.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F171659A Futures and options.
(1)
(a)
“investments” (or “investment”) includes futures contracts and options contracts, and
(b)
income derived from transactions relating to such contracts shall be regarded as income derived from (or income from) such contracts.
F172. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2)
For the purposes of subsection (1) above a contract is not prevented from being a futures contract or an options contract by the fact that any party is or may be entitled to receive or liable to make, or entitled to receive and liable to make, only a payment of a sum (as opposed to a transfer of assets other than money) in full settlement of all obligations.
F173659B Definition of insurance company.
F174. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
659C Effect of appointment or arrangements under section 659B.
F175. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F176659D Interpretation of provisions about pension sharing.
F177. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F178659E Treatment of income from property investment LLPs
(1)
The exemptions specified below do not apply to income derived from investments, deposits or other property held as a member of a property investment LLP.
(2)
The exemptions are those provided by—
F179. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F179. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
section 613(4) (Parliamentary pension funds),
section 614(3) (certain colonial, &c. pension funds),
section 614(4) (the Overseas Service Pension Fund),
section 614(5) (other pension funds for overseas employees),
F179. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F179. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)
The income to which subsection (1) above applies includes relevant stock lending fees, in relation to any investments, to which any of the provisions listed in subsection (2) above would apply by virtue of section 129B.
(4)
Section 659A (treatment of futures and options) applies for the purposes of subsection (1) above.