Finance Act 2004

[F1 Conversion of certain drawdown pension funds into flexi-access drawdown funds U.K.

Textual Amendments

F1 Sch. 28 paras. 8A-8D and cross-headings inserted (17.12.2014) (with effect in accordance with Sch. 1 para. 3(2) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 3(1)

8B (1) Sub-paragraph (2) applies if— U.K.

(a) a member's drawdown pension fund in respect of an arrangement came into being before 6 April 2015,

(b) section 165(3A) did not apply to the arrangement immediately before 6 April 2015, and

(c) at a time on or after 6 April 2015, a payment—

(i) of income withdrawal from the fund, or

(ii) of a short-term annuity purchased using sums or assets out of the fund,

is made that (apart from sub-paragraph (2)) would breach the cap.

(2) The sums and assets that make up the fund immediately before the payment is made become newly-designated funds immediately before the payment is made (so that the payment is made out of the member's flexi-access drawdown fund in respect of the arrangement and therefore is not part of the total capped by pension rule 5).

(3) For the purposes of sub-paragraph (1)(c), a payment of drawdown pension in respect of an arrangement is one that would breach the cap if, when its amount is added to the amounts of any drawdown pension in respect of the arrangement—

(a) paid—

(i) before it is made, but

(ii) in the same drawdown pension year in respect of the arrangement, or

(b) paid at the time it is made,

the total is greater than the cap set by pension rule 5 for that drawdown pension year.

8C (1) Sub-paragraph (2) applies if— U.K.

(a) a member's drawdown pension fund in respect of an arrangement came into being before 6 April 2015,

(b) section 165(3A) did not apply to the arrangement immediately before 6 April 2015, and

(c) the member notifies the [F2 scheme manager] that the member wishes the fund to become the member's flexi-access drawdown fund in respect of the arrangement.

(2) At—

(a) the time the [F2 scheme manager] accepts the notification, or

(b) the start of 6 April 2015 if that is later,

the sums and assets that then make up that fund become newly-designated funds, if they have not previously done so by the operation of paragraph 8B.

Textual Amendments

F2 Words in Sch. 28 paras. 8C, 8D substituted by S.I. 2006/207, reg. 14(3)(ba) (as inserted (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 33(3)(a)(4) (with Sch. 1 para. 33(5))

8D (1) Sub-paragraphs (2) and (3) apply if— U.K.

(a) there is a recognised transfer from one registered pension scheme (“the old scheme”) to another registered pension scheme (“the new scheme”) of member-designated funds held for the purposes of an arrangement under the old scheme, and

(b) the sums or assets transferred are, under the arrangement under the new scheme for whose purposes they are first held after the transfer, designated as available for the payment of drawdown pension.

(2) If the member, when or before making the designation, notifies the [F2 scheme manager] of the new scheme that the member wishes the sums or assets to be newly-designated funds, the sums or assets become newly-designated funds and do so—

(a) when the designation is made, or

(b) if later, immediately after the transfer,

except that, if both the designation and transfer are made before 6 April 2015, the sums or assets become newly-designated funds at the start of 6 April 2015.

(3) If sub-paragraph (2) does not provide for the sums or assets to become newly-designated funds, the sums or assets become member-designated funds and do so—

(a) when the designation is made, or

(b) if later, immediately after the transfer.]

Textual Amendments

F2 Words in Sch. 28 paras. 8C, 8D substituted by S.I. 2006/207, reg. 14(3)(ba) (as inserted (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 33(3)(a)(4) (with Sch. 1 para. 33(5))