Finance Act 1999

Section 52.

SCHEDULE 5 Scottish Parliament and devolved assemblies: exemptions and reliefs

Payments on dissolution, etc., or loss of office

1 For section 190 of the Taxes Act 1988 (exemption from charge as emoluments of certain payments made to members of Parliament and others) substitute—

“190 Payments to MPs and others

(1) Grants and payments to which this section applies shall be exempt from income tax under Schedule E as emoluments, but without prejudice to any charge to tax under section 148 (payments in connection with termination of employment, etc.).

(2) This section applies to grants and payments if they are made—

(a) in pursuance of a resolution of the House of Commons to a person ceasing to be a member of that House on a dissolution of Parliament;

(b) under section 13 of the [1984 c. 52.] Parliamentary Pensions etc. Act 1984 or section 4 of the [1991 c. 5.] Ministerial and other Pensions and Salaries Act 1991 (grants to persons ceasing to hold certain Ministerial and other offices); or

(c) under section 3 of the [1979 c. 50.] European Parliament (Pay and Pensions) Act 1979 (resettlement grants for persons ceasing to be Representatives).

(3) This section also applies to grants and payments if they are not pension payments and they are made—

(a) under section 81(3) of the [1998 c. 46.] Scotland Act 1998—

(i) to a person ceasing to be a member of the Scottish Parliament on the dissolution of the Scottish Parliament, or

(ii) to a person ceasing to hold an office corresponding to a relevant office;

(b) under section 18(1) of the [1998 c. 38.] Government of Wales Act 1998 to a person ceasing to be a member of the National Assembly for Wales on the expiry of his term of office; or

(c) under section 48(1) of the [1998 c. 47.] Northern Ireland Act 1998—

(i) to a person ceasing to be a member of the Northern Ireland Assembly on the dissolution of the Assembly, or

(ii) to a person ceasing to hold an office corresponding to a relevant office.

(4) In subsection (3) above “a relevant office” has the same meaning as in section 4 of the [1991 c. 5.] Ministerial and other Pensions and Salaries Act 1991.”

Payments in respect of overnight expenses or EU travel

2 (1) After section 200 of the Taxes Act 1988 insert—

“200ZA Expenses of members of Scottish Parliament, National Assembly for Wales or Northern Ireland Assembly

(1) This section applies to payments made—

(a) to members of the Scottish Parliament under section 81(2) of the [1998 c. 46.] Scotland Act 1998,

(b) to members of the National Assembly for Wales under section 16(2) of the [1998 c. 38.] Government of Wales Act 1998, or

(c) to members of the Northern Ireland Assembly under section 47(2) of the [1998 c. 47.] Northern Ireland Act 1998.

(2) If a payment to which this section applies is expressed to be made in respect of necessary overnight expenses or EU travel expenses, the payment shall not be regarded as income for any purpose of the Income Tax Acts.

(3) For the purposes of subsection (2) above—

• “necessary overnight expenses” are additional expenses necessarily incurred by the member for the purpose of performing duties as a member in staying overnight away from the member’s only or main residence, either in the area in which the body of which he is a member sits or in the constituency or region for which he has been returned, and

• “EU travel expenses” are the cost of, and any additional expenses incurred in, travelling between the United Kingdom and—

  (a)

  any European Union institution in Brussels, Luxembourg or Strasbourg, or

  (b)

  the national parliament of another member State.”

(2) For section 198(4) of that Act (exclusion of deduction in respect of expenditure for which parliamentary allowance may be given) substitute—

“(4) No deduction shall be made under this section in respect of expenditure incurred by—

(a) a member of the House of Commons, or

(b) a member of the Scottish Parliament, or

(c) a member of the National Assembly for Wales, or

(d) a member of the Northern Ireland Assembly,

in, or in connection with, the provision or use of residential or overnight accommodation to enable him to perform his duties as such a member in or about the place where the body of which he is a member sits or the constituency or region for which he has been returned.”

(3) For section 74 of the [1990 c. 1.] Capital Allowances Act 1990 (exclusion of capital allowances in respect of expenditure for which parliamentary allowance may be given) substitute—

“74 Allowances not available: expenses of MPs and others

No allowance shall be made under this Part in respect of expenditure incurred by—

(a) a member of the House of Commons, or

(b) a member of the Scottish Parliament, or

(c) a member of the National Assembly for Wales, or

(d) a member of the Northern Ireland Assembly,

in, or in connection with, the provision or use of residential or overnight accommodation to enable him to perform his duties as such a member in or about the place where the body of which he is a member sits or the constituency or region for which he has been returned.”

Office-holders' transport and subsistence

3 In section 200AA of the Taxes Act 1988 (exemption from Schedule E charge of expenses payments to holders of ministerial offices, etc.), in subsection (2) after paragraph (b) insert—

“, and

(c) any office under the [1998 c. 46.] Scotland Act 1998, the [1998 c. 38.] Government of Wales Act 1998 or the [1998 c. 47.] Northern Ireland Act 1998 that corresponds to any of the offices mentioned in paragraph (a) or (b) above.”

Trustees' income from parliamentary pension funds

4 In section 613(4) of the Taxes Act 1988 (Parliamentary pension funds: exemption from tax on income derived from funds), after paragraph (b) insert—

“(bb) any fund maintained for the purposes of a pension scheme—

(i) established for members of the Scottish Parliament under section 81(4) of the Scotland Act 1998,

(ii) established for members of the Welsh Assembly under section 18(2) of the Government of Wales Act 1998, or

(iii) established for members of the Northern Ireland Assembly under section 48(2) of the Northern Ireland Act 1998;”;

and in the closing words for “Funds” (twice) substitute “funds”.

Relevant statutory schemes

5 (1) In section 611A of the Taxes Act 1988 (definition of relevant statutory scheme), for subsection (1) substitute—

“(1) In this Chapter any reference to a relevant statutory scheme is to—

(a) a statutory scheme established before 14th March 1989, or

(b) a statutory scheme established on or after that date and entered in the register maintained by the Board for the purposes of this section, or

(c) a parliamentary pension scheme.”

(2) At the end of that section add—

“(5) In subsection (1)(c) “parliamentary pension scheme” means—

(a) the Parliamentary pension scheme within the meaning of the [1987 c. 45.] Parliamentary and other Pensions Act 1987;

(b) any pension scheme established for members of the Scottish Parliament under section 81(4) of the Scotland Act 1998;

(c) any pension scheme established for members of the Welsh Assembly under section 18(2) of the Government of Wales Act 1998;

(d) any pension scheme established for members of the Northern Ireland Assembly under section 48(2) of the Northern Ireland Act 1998;

(e) the pension scheme established for members of the European Parliament under section 4 of the [1979 c. 50.] European Parliament (Pay and Pensions) Act 1979;

(f) the pension scheme established under section 3 of the [1965 c. 18(N.I.).] Ministerial Salaries and Members' Pensions Act (Northern Ireland) 1965;

(g) the pension scheme established under the [S.I. 1976/1779.] Assembly Pensions (Northern Ireland) Order 1976.”

Pensions of members of the Scottish Executive

6 (1) Sub-paragraph (2) below applies if provision under the [1998 c. 46.] Scotland Act 1998 is made for the salary paid to members of the Scottish Parliament who are also members of the Scottish Executive to be lower than that of other members of the Scottish Parliament.

(2) In that case, sections 629 and 654 of the Taxes Act 1988 (under which part of the salary of the holder of certain offices is treated as remuneration as a member of the House of Commons) apply in relation to the salary of a member of the Scottish Executive who is also a member of the Scottish Parliament as they apply in relation to the salary of the holder of a qualifying office within the meaning of those sections who is also a member of the House of Commons, with such modifications as the Treasury may specify by order.

(3) In this paragraph references to a member of the Scottish Executive include a junior Scottish Minister.