SCHEDULE 28Registered pension schemes: authorised pensions—supplementary
Part 1Pension rules
Short-term annuity
6
(1)
F1For the purposes of this Part an annuity payable to the member is a short-term annuity if—
(a)
it is purchased by the application of sums or assets representing the whole or any part of the member’s unsecured pension fund in respect of an arrangement,
(b)
it is payable by an insurance company,
(c)
the member had an opportunity to select the insurance company,
(d)
it is payable for a term which does not exceed five years and ends before the member reaches the age of 75, and
F2(e)
its amount either cannot decrease or falls to be determined in any manner prescribed by regulations made by the Board of Inland Revenue.
F3(1A)
An annuity does not fail to satisfy sub-paragraph (1)(e) by reason of the operation of a pension sharing order or provision.
(1B)
The Board of Inland Revenue may by regulations make provision in relation to cases in which a short-term annuity payable by an insurance company (“the original short-term annuity”) ceases to be payable and in consequence of that—
(a)
sums or assets (or both) are transferred from the insurance company to another insurance company and are applied towards the provision of either another short-term annuity (a “new short-term annuity”) or a scheme pension, lifetime annuity, dependants' scheme pension, dependants' annuity or dependants' short-term annuity by the other insurance company, or
(b)
sums or assets are transferred to the relevant registered pension scheme.
(1C)
The regulations may provide that—
(a)
in a case where a new short-term annuity becomes payable, the new short-term annuity is to be treated, to such extent as is prescribed by the regulations and for such of the purposes of this Part as are so prescribed, as if it were the original short-term annuity, and
(b)
in any other case, the relevant registered pension scheme is to be treated as making an unauthorised payment to the member of an amount equal to the aggregate of the amount of the sums, and the market value of the assets, transferred.
(1D)
For the purposes of sub-paragraphs (1B) and (1C) a registered pension scheme is the relevant registered pension scheme if the original short-term annuity was acquired using sums or assets held for the purposes of the pension scheme.
F4(2)
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