Part 4Pension schemes etc

Chapter 7Compliance

Discharge of tax liability: good faith

F1267Lifetime allowance charge

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268Unauthorised payments surcharge and scheme sanction charge

(1)

This section applies where—

(a)

a person is liable to the unauthorised payments surcharge in respect of an unauthorised payment, or

(b)

the scheme administrator of a registered pension scheme is liable to the scheme sanction charge in respect of a scheme chargeable payment.

(2)

The person liable to the unauthorised payments surcharge may apply to the Inland Revenue for the discharge of the person’s liability to the unauthorised payments surcharge in respect of the unauthorised payment on the ground mentioned in subsection (3).

(3)

The ground is that in all the circumstances of the case, it would be not be just and reasonable for the person to be liable to the unauthorised payments surcharge in respect of the payment.

(4)

On receiving an application by a person under subsection (2) the Inland Revenue must decide whether to discharge the person’s liability to the unauthorised payments surcharge in respect of the payment.

(5)

The scheme administrator may apply to the Inland Revenue for the discharge of the scheme administrator’s liability to the scheme sanction charge in respect of a scheme chargeable payment on the ground mentioned in subsection (6) or (7).

(6)

In the case of a scheme chargeable payment which is treated as being an unauthorised member payment by section 172F2, 172A, 172B, F3... 172C or 172D F4..., the ground is that, in all the circumstances of the case, it would not be just and reasonable for the scheme administrator to be liable to the scheme sanction charge.

(7)

In any other case, the ground is that—

(a)

the scheme administrator reasonably believed that the unauthorised payment was not a scheme chargeable payment, and

(b)

in all the circumstances of the case, it would not be just and reasonable for the scheme administrator to be liable to the scheme sanction charge in respect of the unauthorised payment.

F5(7A)

Subsection (7) applies with the omission of its paragraph (a) if the scheme chargeable payment is a payment of a lump sum where the conditions in paragraph 1B(2)(a) to (g) of Schedule 29 are met.

(8)

On receiving an application under subsection (5), the Inland Revenue must decide whether to discharge the scheme administrator’s liability to the scheme sanction charge in respect of the unauthorised payment.

(9)

The Inland Revenue must notify the applicant of the decision on an application under this section.

(10)

Regulations made by the Board of Inland Revenue may make provision supplementing this section; and the regulations may in particular make provision as to the time limits for the making of an application.

269Appeal against decision on discharge of liability

(1)

This section applies where the Inland Revenue—

(a)

decides to refuse an application under F6section 237D (discharge of scheme administrator's liability to annual allowance charge), F7section 244N (discharge of liability to overseas transfer charge), F8... or section 268 (discharge of liability to unauthorised payments surcharge or scheme sanction charge), F9...

F9(b)

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(2)

The applicant may appeal against the decision.

F10(3)

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F10(4)

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(5)

An appeal under this section against a decision must be brought within the period of 30 days beginning with the day on which the applicant was given notification of the decision.

(6)

F11On an appeal under subsection (1)(a) that is notified to the tribunal, the tribunal must consider whether the applicant’s liability to the F12... unauthorised payments surcharge or scheme sanction charge ought to have been discharged.

(7)

If F13the tribunal considers that the applicant’s liability ought not to have been discharged, F14the tribunal must dismiss the appeal.

(8)

If F13the tribunal considers that the applicant’s liability ought to have been discharged, F14the tribunal must grant the application.

F15(9)

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F15(10)

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F15(11)

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