C1C4C5C6C7C8C9C10C11C13C14C15C16Part 4Pension schemes etc

Annotations:
Modifications etc. (not altering text)
C9

Pt. 4 modified (1.7.2008) (N.I.) (with effect in accordance with reg. 1 of the amending Rule) by The Health and Social Care (Pension Scheme) Regulations (Northern Ireland) 2008 (S.R. 2008/256), regs. 1, 124(1) (with regs. 134, 258)

C11

Pt. 4 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 35 para. 18

C13

Pt. 4 modified (19.7.2011) by Finance Act 2011 (c. 11), Sch. 18 para. 14(3)

C14

Pt. 4 applied (with modifications) (with application in accordance with Sch. 22 para. 1 of the amending Act) by Finance Act 2013 (c. 29), Sch. 22 para. 1(2)

C15

Pt. 4 modified (17.7.2014) by Finance Act 2014 (c. 26), Sch. 6 para. 1(2)(3)

C16

Pt. 4: power to amend conferred (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), s. 4(3)

C13Chapter 3Payments by registered pension schemes

Introductory

I1160Payments by registered pension schemes

1

The only payments which a registered pension scheme is authorised to make to or in respect of a F2person who is or has been a member of the pension scheme are those specified in section 164.

2

In this Part “unauthorised member payment” means—

a

a payment by a registered pension scheme to or in respect of a F3person who is or has been a member of the pension scheme which is not authorised by section 164, and

b

anything which is to be treated as an unauthorised payment to or in respect of a F4person who is or has been a member of the pension scheme under F5this Part.

3

The only payments which a registered pension scheme that is an occupational pension scheme is authorised to make to or in respect of a F6person who is or has been a sponsoring employer are those specified in section 175.

4

In this Part “unauthorised employer payment” means—

a

a payment by a registered pension scheme that is an occupational pension scheme, to or in respect of a F7person who is or has been a sponsoring employer, which is not authorised by section 175, and

b

anything which is to be treated as an unauthorised payment to a F8person who is or has been a sponsoring employer under section 181.

F264A

If an unauthorised member payment or unauthorised employer payment made to or in respect of a person would have been greater but for a reduction made in respect of the whole, or any proportion, of the amount which the scheme administrator considers may be the amount of the liability to the scheme sanction charge in respect of it, it is to be regarded for the purposes of this Part as increased by the amount of the reduction.

4B

But if the amount, or that proportion of the amount, of that liability is in fact less than the amount of the reduction, a subsequent payment of an amount not exceeding the difference between that amount and the amount of the reduction made—

a

to or in respect of the same person, and

b

before the end of the period of two years beginning with the date on which the unauthorised member payment or unauthorised employer payment was made,

is not to be regarded for the purposes of this Part as an unauthorised member payment or unauthorised employer payment.

5

In this Part “unauthorised payment” means—

a

an unauthorised member payment, or

b

an unauthorised employer payment.

6

As well as section 157 (de-registration), the following provisions—

a

section 208 (unauthorised payments charge),

b

section 209 (unauthorised payments surcharge),

c

section 239 (scheme sanction charge), and

d

section 242 (de-registration charge),

specify consequences of making unauthorised payments.

7

Sections 182 to 185 contain provision about amounts that a registered pension scheme is not authorised to borrow.

F17A

Sections 185A to 185I contain provision about the receipt of income and gains from taxable property.

8

As well as section 157, sections 239 and 242 specify consequences of unauthorised borrowing F9and the receipt of income and gains from taxable property.

9

Schedule 36 contains (in Parts 3 and 4) transitional provision about unauthorised payments.

I2C2161Meaning of “payment” etc

1

This section applies for the interpretation of this Chapter.

2

“Payment” includes a transfer of assets and any other transfer of money’s worth.

3

Subsection (4) applies to a payment made or benefit provided under or in connection with an investment (including an insurance contract or annuity) acquired using sums or assets held for the purposes of a registered pension scheme.

C34

The payment or benefit is to be treated as made or provided from sums or assets held for the purposes of the pension scheme, even if the pension scheme has been wound up since the investment was acquired.

5

A payment made by a registered pension scheme to F16or in respect of a person who—

a

is connected with a F10person who is or has been a member or sponsoring employer (or was connected with F11such a person at the date of the person's death), and

b

is not a F10person who is or has been a member or sponsoring employer,

is to be treated as made in respect of the F10person who is or has been a member or sponsoring employer.

6

Any asset held by a person connected with a F12person who is or has been a member or sponsoring employer (or who was connected with F13such a person at the date of the person's death) is to be treated as held for the benefit of the F12person who is or has been a member or sponsoring employer.

7

Any increase in the value of an asset held by, or reduction in the liability of, a person connected with a F14person who is or has been a member or sponsoring employer (or who was connected with F15such a person at the date of the person's death) is to be treated as an increase or reduction for the benefit of the F14person who is or has been a member or sponsoring employer.

F258

For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

I3162Meaning of “loan”

1

This section applies for the interpretation of this Chapter.

2

“Loan” does not include the purchase of or subscription to debentures, debenture stock, loan stock, bonds, certificates of deposit or other instruments creating or acknowledging indebtedness which are—

a

listed or dealt in on a recognised stock exchange (within the meaning of F24section 1005 of ITA 2007), or

b

offered to the public.

3

A guarantee of a loan made to or in respect of a F19person who is or has been a member or sponsoring employer of a registered pension scheme F17, or to or in respect of a person who is connected with a F19person who is or has been a member or sponsoring employer of a registered pension scheme but is not F20such a person, is to be treated as a loan to or in respect of the F19person who is or has been a member or sponsoring employer of an amount equal to the amount guaranteed.

4

If a F21person who is or has been a member or sponsoring employer of a registered pension scheme F18or a person who is connected with a F21person who is or has been a member or sponsoring employer of a registered pension scheme but is not F22such a person—

a

is liable to pay a debt, the right to payment of which constitutes an asset held for the purposes of the pension scheme, but

b

is not required to pay it by the relevant date,

the debt is to be treated as a loan made by the pension scheme to the F21person who is or has been a member or sponsoring employer on that date.

5

The relevant date is the date by which a person at arm’s length from the pension scheme might be expected to be required to pay the debt.

F236

For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

I4163Meaning of “borrowing” etc

1

This section applies for the interpretation of this Chapter.

C122

Borrowing is borrowing by a registered pension scheme if the amount borrowed is to be repaid from sums or assets held for the purposes of the pension scheme.

3

A liability is a liability of a registered pension scheme if the liability is to be met from sums or assets held for the purposes of the pension scheme.

4

Borrowing by a registered pension scheme is in respect of an arrangement if it is properly attributable to the arrangement in accordance with the provisions of the pension scheme and any just and reasonable apportionment.