Income and Corporation Taxes Act 1988

639 Member’s contributions. U.K.

[F1 (1) An individual who pays a contribution under approved personal pension arrangements made by him shall be entitled to relief under this section in respect of the contribution.

(1A) Subsection (1) above is subject to the other provisions of this Chapter.

(1B) The total amount of contributions in respect of which relief may be given to an individual under this section for any year of assessment must not exceed—

(a) the permitted maximum for the year, as defined in section 638(4), or

(b) the earnings threshold for the year,

whichever is the greater.

(2) Any relief under this section shall be given in accordance with—

(a) subsections (3) and (4) below, and

(b) where applicable, subsection (5A) below.

(2A) Relief in accordance with subsections (3) and (4) below shall be subject to such conditions as the Board may prescribe in regulations.]

[F2 (3) An individual who is entitled to relief under this section in respect of a contribution shall be entitled, on making the payment, to deduct and retain out of it a sum equal to income tax on the contribution at the basic rate for the year of assessment in which the payment is made.]

[F3 (4) Where a sum is deducted under subsection (3) above from a contribution—

(a) the scheme administrator shall allow the deduction on receipt of the residue;

(b) the individual paying the contribution shall be acquitted and discharged of so much money as is represented by the deduction as if the sum had been actually paid; and

(c) the sum deducted shall be treated as income tax paid by the scheme administrator.]

[F4 (4A) Where payment of a contribution under approved personal pension arrangements is received—

(a) the scheme administrator shall be entitled to recover from the Board, in accordance with regulations, an amount which by virtue of subsection (4)(c) above is treated as income tax paid by him; and

(b) any amount so recovered shall be treated for the purposes of the Tax Acts in like manner as the payment of the contribution to which it relates.]

(5) Regulations under this section may make provision for carrying subsections [F5 (3) to (4A)] above into effect and, without prejudice to the generality of that, may provide—

(a) for the manner in which claims for the recovery of a sum under subsection [F6 (4A)(a)] may be made;

(b) for the giving of such information, in such form, as may be prescribed by or under the regulations;

(c) for the inspection by persons authorised by the Board of books, documents and other records.

[F7 (5A) Where—

(a) an individual is entitled to relief under this section in respect of contributions paid in any year of assessment, and

(b) apart from this subsection, income tax at the higher rate is chargeable in respect of any part of his total income for the year,

the basic rate limit for that year shall in his case be increased by the addition of the amount of the contributions in respect of which he is entitled to relief under this section.

(5B) Relief in accordance with subsection (5A) above shall be given only on a claim made for the purpose.]

(6) M1 Where relief under this section for any year of assessment is claimed and allowed (whether or not it then falls to be given for that year), and afterwards an assessment, alteration of an assessment, or other adjustment of the claimant’s liability to tax is made, there shall also be made such consequential adjustments in the relief allowed or given under this section for that or any subsequent year as are appropriate.

(7) M2 Where relief [F8 is given under this section] for any year of assessment in respect of a contribution, relief shall not be given in respect of it under any other provision of the Income Tax Acts for the same or any subsequent year, nor (in the case of a contribution under an annuity contract) in respect of any other premium or consideration for an annuity under the same contract.

(8) References in the Income Tax Acts to relief in respect of life assurance premiums shall not be taken to include relief under this section.

Textual Amendments

F1 S. 639(1)-(1B)(2)(2A) substituted for s. 639(1)(2) (with effect in accordance with Sch. 13 para. 15(9) of the amending Act) by Finance Act 2000 (c. 17), Sch. 13 para. 15(2) (with Sch. 13 Pt. 2)

F2 S. 639(3) substituted (with effect in accordance with Sch. 13 para. 15(9) of the amending Act) by Finance Act 2000 (c. 17), Sch. 13 para. 15(3) (with Sch. 13 Pt. 2)

F3 S. 639(4) substituted (with effect in accordance with Sch. 13 para. 15(9) of the amending Act) by Finance Act 2000 (c. 17), Sch. 13 para. 15(4) (with Sch. 13 Pt. 2)

F4 S. 639(4A) inserted (with effect in accordance with Sch. 13 para. 15(9) of the amending Act) by Finance Act 2000 (c. 17), Sch. 13 para. 15(5) (with Sch. 13 Pt. 2)

F5 Words in s. 639(5) substituted (with effect in accordance with Sch. 13 para. 15(9) of the amending Act) by Finance Act 2000 (c. 17), Sch. 13 para. 15(6)(a) (with Sch. 13 Pt. 2)

F6 Words in s. 639(5) substituted (with effect in accordance with Sch. 13 para. 15(9) of the amending Act) by Finance Act 2000 (c. 17), Sch. 13 para. 15(6)(b) (with Sch. 13 Pt. 2)

F7 S. 639(5A)(5B) inserted (with effect in accordance with Sch. 13 para. 15(9) of the amending Act) by Finance Act 2000 (c. 17), Sch. 13 para. 15(7) (with Sch. 13 Pt. 2)

F8 Words in s. 639(7) substituted (with effect in accordance with Sch. 13 para. 15(9) of the amending Act) by Finance Act 2000 (c. 17), Sch. 13 para. 15(8) (with Sch. 13 Pt. 2)

Modifications etc. (not altering text)

C1 For regulations see Part III Vol.5 (under

“Personal pension schemes”).

Marginal Citations

M1 Source-1987 (No.2) s.48

M2 Source-1987 (No.2) s.49