Income Tax (Earnings and Pensions) Act 2003 (c. 1)

[F1 Part 7A U.K. Employment income provided through third parties

Textual Amendments

F1 Pt. 7A inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 1

Modifications etc. (not altering text)

C1 Pt. 7A modified (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 35(6)

C2 Pt. 7A modified (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 1(8)

C3 Pt. 7A modified (22.7.2020) by 2017 c. 32, Sch. 11 para. 1A(2)(6) (as inserted by Finance Act 2020 (c. 14), s. 16(3))

CHAPTER 1 U.K. Application etc

Exclusions U.K.

554T Exclusions: employee pension contributions U.K.

(1) Chapter 2 does not apply by reason of a relevant step within section 554B if the sum of money or asset which is the subject of the step arises or derives (whether wholly or partly or directly or indirectly) from an excluded pension contribution paid by A on or after 6 April 2011.

(2) If the sum of money or asset arises or derives from the excluded pension contribution only partly, the relevant step is to be treated for the purposes of this Part as being two separate relevant steps—

(a) one in relation to the sum of money or asset so far as it arises or derives from the excluded pension contribution, and

(b) one in relation to the sum of money or asset so far as it does not arise or derive from the excluded pension contribution,

with subsection (1) applying only in relation to the separate relevant step mentioned in paragraph (a).

(3) Chapter 2 does not apply by reason of a relevant step within section 554C or 554D if the sum of money or asset which is the subject of the step—

(a) represents relevant benefits, and

(b) arises or derives (whether wholly or partly or directly or indirectly) from an excluded pension contribution paid by A.

(4) If the sum of money or asset arises or derives from the excluded pension contribution only partly, the relevant step is to be treated for the purposes of this Part as being two separate relevant steps—

(a) one in relation to the sum of money or asset so far as it arises or derives from the excluded pension contribution, and

(b) one in relation to the sum of money or asset so far as it does not arise or derive from the excluded pension contribution,

with subsection (3) applying only in relation to the separate relevant step mentioned in paragraph (a).

(5) In order to give effect to subsection (2) or (4), the sum of money or asset which is the subject of the relevant step is to be apportioned between the two separate relevant steps on a just and reasonable basis.

(6) For the purposes of this section an excluded pension contribution is a contribution—

(a) which is made to an arrangement by A by way of a payment of a sum of money,

(b) by virtue of which A acquires rights to receive relevant benefits under the arrangement (and nothing else),

(c) which is neither a relievable pension contribution nor a tax-relieved contribution, and

(d) which is not a repayment of any loan and otherwise has nothing to do with any loan and has nothing to do with a sum of money or asset which has been the subject of a relevant step within section 554C(1)(d).

(7) In this section—

• “relevant benefits” has the same meaning as in Chapter 2 of Part 6, but ignoring section 393B(2)(a),

• “relievable pension contribution” means a contribution in respect of which an individual is entitled to relief under section 188 of FA 2004, and

• “tax-relieved contribution” has the meaning given by paragraph 3(3) of Schedule 34 to FA 2004.]