Finance Act 2004

Money purchase arrangements U.K.

Dependants' annuity U.K.

17 (1) [F1 For the purposes of this Part an] annuity payable to a dependant is a dependants' annuity if— U.K.

[F2 (za) either—

(i) it is purchased together with a lifetime annuity payable to the member and the member becomes entitled to that lifetime annuity before 6 April 2015, or

(ii) it is purchased after the member's death and the dependant becomes entitled to it before 6 April 2015,]

(a) it is payable by an insurance company,

(b) the member or dependant had an opportunity to select the insurance company,

[F3 (c) its amount either cannot decrease or falls to be determined in any manner prescribed by regulations made by the Board of Inland Revenue,]

(d) where the dependant is not the member’s child, it is payable until the dependant’s death or until the earlier of the dependant’s marrying[F4 , entering into a civil partnership] or dying, and

(e) where the dependant is the member’s child, it is payable until the earlier of the dependant’s ceasing to be a dependant or dying, or until the earliest of the dependant’s marrying[F5 , entering into a civil partnership], ceasing to be a dependant or dying.

[F6 (1ZA) For the purposes of this Part, but subject to any provision made under sub-paragraph (4)(za), an annuity payable to a dependant is also a dependants' annuity if—

(a) either—

(i) it is purchased together with a lifetime annuity payable to the member and the member becomes entitled to that lifetime annuity on or after 6 April 2015, or

(ii) it is purchased after the member's death and the dependant becomes entitled to it on or after 6 April 2015,

(b) it is payable by an insurance company,

(c) where the dependant is not the member's child, it is payable until the dependant's death or until the earliest of the dependant's marrying, entering into a civil partnership or dying, and

(d) where the dependant is the member's child, it is payable until the earlier of the dependant's ceasing to be a dependant or dying, or until the earliest of the dependant's marrying, entering into a civil partnership, ceasing to be a dependant or dying.]

[F7 (1A) For the purposes of [F8 sub-paragraphs (1)(za) and (1ZA)(a)] a dependants' annuity is purchased together with a lifetime annuity if the dependant's annuity is related to the lifetime annuity.]

[F9 (2) An annuity does not fail to satisfy sub-paragraph (1)(c) by reason of the operation of a pension sharing order or provision.

(3) The Board of Inland Revenue may by regulations make provision in relation to cases in which a dependants' annuity payable to a person (“the original dependants' 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 dependants' annuity (a “new dependants' annuity”) or a scheme pension, lifetime annuity, short-term annuity, dependants' scheme pension or dependants' short-term annuity by the other insurance company, or

(b) sums or assets are transferred to the relevant registered pension scheme.

(4) The regulations may provide that—

[F10 (za) in a case where—

(i) a new annuity becomes payable,

(ii) the dependant becomes entitled to it on or after 6 April 2015,

(iii) it would be a dependants' annuity if any provision made under this paragraph were ignored,

(iv) the terms of the contract for it are such that there will or could be decreases in its amount other than allowed decreases (see sub-paragraph (6)), and

(v) any other conditions prescribed by the regulations are met,

the new annuity is not a dependants' annuity for the purposes of this Part,]

(a) in a case where a new dependants' annuity becomes payable, the new dependants' 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 dependants' annuity, and

(b) in [F11 a case other than one where a new dependants' annuity becomes payable], the relevant registered pension scheme is to be treated as making an unauthorised payment in respect of the member of an amount equal to the aggregate of the amount of the sums, and the market value of the assets, transferred.

F12 (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) For the purposes of sub-paragraphs (3) and (4) a registered pension scheme is the relevant registered pension scheme if the original dependants' annuity was acquired using sums or assets held for the purposes of the pension scheme.]

[F13 (6) In sub-paragraph (4)(za)(iv) “allowed decreases” means decreases from time to time allowed by regulations under sub-paragraph (1)(c); and any such regulations are to be treated as having effect for this purpose.]

Textual Amendments

F1 Words in Sch. 28 para. 17(1) substituted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 15(2), 64(1)

F2 Sch. 28 para. 17(1)(za) substituted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 47

F3 Sch. 28 para. 17(1)(c) substituted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 15(3), 64(1)

F4 Words in Sch. 28 para. 17(1)(d) inserted (22.2.2007) by The Tax and Civil Partnership Regulations 2007 (S.I. 2007/493), regs. 1, 2(3)

F5 Words in Sch. 28 para. 17(1)(e) inserted (22.2.2007) by The Tax and Civil Partnership Regulations 2007 (S.I. 2007/493), regs. 1, 2(3)

F6 Sch. 28 para. 17(1ZA) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 39

F7 Sch. 28 para. 17(1A) inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 29(3), 64(1)

F8 Words in Sch. 28 para. 17(1A) substituted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 48

F9 Sch. 28 para. 17(2)-(5) substituted for Sch. 28 para. 17(2) (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 15(4), 64(1)

F10 Sch. 28 para. 17(4)(za) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 49(1)(a)

F11 Words in Sch. 28 para. 17(4)(b) substituted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 49(1)(b)

F12 Sch. 28 para. 17(4A) omitted (21.7.2009) by virtue of Finance Act 2009 (c. 10), s. 75(2)(d)

F13 Sch. 28 para. 17(6) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 49(2)

[F14 Dependants' drawdown pension] U.K.

Textual Amendments

F14 Sch. 28 para. 18 cross-heading substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 13(2)

18 U.K. [F15 “Dependants' drawdown pension”] means—

(a) a dependants' short-term annuity, or

(b) dependants' income withdrawal.

Textual Amendments

F15 Words in Sch. 28 para. 18 substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 13(1)

F16 19 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F16 Sch. 28 para. 19 omitted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 16 para. 78(c)

Dependants' short-term annuity U.K.

20 (1) [F17 For the purposes of this Part an] annuity payable to a dependant is a dependants' short-term annuity if— U.K.

(a) it is purchased by the application of sums or assets representing the whole or any part of the [F18 dependant's drawdown pension fund] in respect of an arrangement,

(b) it is payable by an insurance company,

(c) the dependant had an opportunity to select the insurance company,

[F19 (ca) the dependant becomes entitled to it before 6 April 2015,]

(d) it is payable for a term which does not exceed five years and ends before the dependant F20 ... dies, and

[F21 (e) its amount either cannot decrease or falls to be determined in any manner prescribed by regulations made by the Board of Inland Revenue.]

[F22 (1ZA) For the purposes of this Part, but subject to any provision made under sub-paragraph (1C)(za), an annuity payable to a dependant is also a dependants' short-term annuity if—

(a) it is purchased by the application of sums or assets representing the whole or any part of the dependant's drawdown pension fund, or of the dependant's flexi-access drawdown fund, in respect of an arrangement,

(b) it is payable by an insurance company,

(c) the dependant becomes entitled to it on or after 6 April 2015, and

(d) it is payable for a term which does not exceed five years and ends before the dependant dies.]

[F23 (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 dependants' short-term annuity payable to a person (“the original dependants' 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 dependants' short-term annuity (a “new dependants' short-term annuity”) or a scheme pension, lifetime annuity, short-term annuity, dependants' scheme pension or dependants' 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—

[F24 (za) in a case where—

(i) a new annuity becomes payable,

(ii) the dependant becomes entitled to it on or after 6 April 2015,

(iii) it would be a dependants' short-term annuity if any provision made under this paragraph were ignored,

(iv) the terms of the contract for it are such that there will or could be decreases in its amount other than allowed decreases (see sub-paragraph (1E)), and

(v) any other conditions prescribed by the regulations are met,

the new annuity is not a dependants' short-term annuity for the purposes of this Part,]

(a) in a case where a new dependants' short-term annuity becomes payable, the new dependants' 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 dependants' short-term annuity, and

(b) in [F25 a case other than one where a new dependants' short-term annuity becomes payable], the relevant registered pension scheme is to be treated as making an unauthorised payment in respect of 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 dependants' short-term annuity was acquired using sums or assets held for the purposes of the pension scheme.]

[F26 (1E) In sub-paragraph (1C)(za)(iv) “allowed decreases” means decreases from time to time allowed by regulations under sub-paragraph (1)(e); and any such regulations are to be treated as having effect for this purpose.]

F27 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F17 Words in Sch. 28 para. 20(1) substituted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 16(2), 64(1)

F18 Words in Sch. 28 para. 20(1)(a) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 14(a)

F19 Sch. 28 para. 20(1)(ca) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 50

F20 Words in Sch. 28 para. 20(1)(d) omitted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 16 para. 14(b)

F21 Sch. 28 para. 20(1)(e) substituted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 16(3), 64(1)

F22 Sch. 28 para. 20(1ZA) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 40

F23 Sch. 28 para. 20(1A)-(1D) inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 16(4), 64(1)

F24 Sch. 28 para. 20(1C)(za) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 51(1)(a)

F25 Words in Sch. 28 para. 20(1C)(b) substituted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 51(1)(b)

F26 Sch. 28 para. 20(1E) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 51(2)

F27 Sch. 28 para. 20(2) repealed (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 16(5), 64(1), Sch. 11 Pt. 4

Modifications etc. (not altering text)

C1 Sch. 28 para. 20 modified (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 95

Dependants' income withdrawal U.K.

[F28 21 U.K. Dependants' income withdrawal” means an amount (other than an annuity) which the dependant is entitled to be paid from the dependant's drawdown pension fund in respect of an arrangement [F29 or from the dependant's flexi-access drawdown fund in respect of an arrangement].]

Textual Amendments

F28 Sch. 28 para. 21 substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 15

F29 Words in Sch. 28 para. 21 inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 20

[F30 Dependant's drawdown pension fund] U.K.

Textual Amendments

F30 Sch. 28 para. 22 cross-heading substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 16(5)

22 (1) For the purposes of this Part a [F31 dependant's drawdown pension fund] in respect of an arrangement consists of such of the sums and assets held for the purposes of the arrangement— U.K.

[F32 (a) as are dependant-designated funds, and

(b) have not been applied towards the provision of a dependants' scheme pension.]

[F33 (2) For the purposes of this Part sums or assets held for the purposes of an arrangement are dependant-designated funds if F34 ...—

(a) [F35 they have, at any time before 6 April 2015, been designated] under the arrangement as available for the payment of [F36 dependants' drawdown pension] to the dependant,

[F37 (aa) they have, at any time on or after 6 April 2015, been designated under the arrangement as available for the payment of dependants' drawdown pension to the dependant, and—

(i) sums or assets held for the purposes of the arrangement have, at any time before 6 April 2015, been designated under the arrangement as so available, and

(ii) section 167(2A) did not apply to the arrangement immediately before 6 April 2015,] or

(b) [F38 they] arise, or (directly or indirectly) derive, from [F39 dependant-designated funds under paragraph (a) or (aa) or from sums or assets] which so arise or derive.

(3) If any sums or assets representing a [F40 dependant's drawdown pension fund] in respect of an arrangement under the pension scheme would (apart from this sub-paragraph)—

(a) come to be taken to represent another [F40 dependant's drawdown pension fund] of his under the pension scheme, or [F41 a drawdown pension fund] of his under the pension scheme, or

(b) are applied towards the provision of a scheme pension or a lifetime annuity,

they are to be treated as not doing so.]

Textual Amendments

F31 Words in Sch. 28 para. 22(1) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 16(2)

F32 Sch. 28 para. 22(1)(a)(b) substituted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 21(2), 64(1)

F33 Sch. 28 para. 22(2)(3) inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 21(3), 64(1)

F34 Word in Sch. 28 para. 22(2) omitted (17.12.2014) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 21(a)

F35 Words in Sch. 28 para. 22(2)(a) substituted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 21(b)

F36 Words in Sch. 28 para. 22(2)(a) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 16(3)

F37 Sch. 28 para. 22(2)(aa) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 21(c)

F38 Word in Sch. 28 para. 22(2)(b) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 21(d)(i)

F39 Words in Sch. 28 para. 22(2)(b) substituted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 21(d)(ii)

F40 Words in Sch. 28 para. 22(3) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 16(4)(a)

F41 Words in Sch. 28 para. 22(3)(a) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 16(4)(b)

Modifications etc. (not altering text)

C2 Sch. 28 para. 22 modified (6.4.2006) by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), arts. 1(1), 30(1)-(3)

C3 Sch. 28 para. 22(2) modified (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 96

[F42 Dependant's flexi-access drawdown fund U.K.

Textual Amendments

F42 Sch. 28 paras. 22A-22D and cross-headings inserted (17.12.2014) (with effect in accordance with Sch. 1 para. 4(2) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 4(1)

22A (1) For the purposes of this Part a dependant's flexi-access drawdown fund in respect of an arrangement consists of such of the sums or assets held for the purposes of the arrangement as are newly-designated dependant funds. U.K.

(2) For the purposes of this Part sums or assets held for the purposes of an arrangement are newly-designated dependant funds if—

(a) they—

(i) have, at any time on or after 6 April 2015, been designated under the arrangement as available for the payment of dependants' drawdown pension, and

(ii) are not dependant-designated funds, or

(b) they were dependant-designated funds immediately before 6 April 2015 and section 167(2A) applied to the arrangement at that time, or

(c) they have become newly-designated dependant funds by the operation of paragraph 22B, 22C or 22D, or

(d) they arise, or (directly or indirectly) derive, from newly-designated dependant funds under paragraph (a), (b) or (c) or from sums or assets which so arise or derive.

(3) Any sums or assets that become newly-designated dependant funds under sub-paragraph (2)(b) cease to be dependant-designated funds as from the start of 6 April 2015.

Textual Amendments

F42 Sch. 28 paras. 22A-22D and cross-headings inserted (17.12.2014) (with effect in accordance with Sch. 1 para. 4(2) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 4(1)

Conversion of certain dependants' drawdown funds into flexi-access drawdown funds U.K.

22B (1) Sub-paragraph (2) applies if— U.K.

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

(b) section 167(2A) 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 dependants' income withdrawal from the fund, or

(ii) of a dependants' 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 dependant funds immediately before the payment is made (so that the payment is made out of the dependant's flexi-access drawdown fund in respect of the arrangement and therefore is not part of the total capped by pension death benefit rule 4).

(3) For the purposes of sub-paragraph (1)(c), a payment of dependants' 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 dependants' 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 death benefit rule 4 for that drawdown pension year.

Textual Amendments

F42 Sch. 28 paras. 22A-22D and cross-headings inserted (17.12.2014) (with effect in accordance with Sch. 1 para. 4(2) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 4(1)

22C (1) Sub-paragraph (2) applies if— U.K.

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

(b) section 167(2A) did not apply to the arrangement immediately before 6 April 2015, and

(c) the dependant notifies the [F43 scheme manager] that the dependant wishes the fund to become the dependant's flexi-access drawdown fund in respect of the arrangement.

(2) At—

(a) the time the [F43 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 dependant funds, if they have not previously done so by the operation of paragraph 22B.

Textual Amendments

F42 Sch. 28 paras. 22A-22D and cross-headings inserted (17.12.2014) (with effect in accordance with Sch. 1 para. 4(2) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 4(1)

F43 Words in Sch. 28 paras. 22C, 22D substituted by S.I. 2006/207, reg. 14(3)(ea) (as inserted (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 33(3)(c)(4) (with Sch. 1 para. 33(5))

22D (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 dependant-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 dependant, when or before the designation is made, notifies the [F43 scheme manager] of the new scheme that the dependant wishes the sums or assets to be newly-designated dependant funds, the sums or assets become newly-designated dependant 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 dependant 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 dependant funds, the sums or assets become dependant-designated funds and do so—

(a) when the designation is made, or

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

Textual Amendments

F42 Sch. 28 paras. 22A-22D and cross-headings inserted (17.12.2014) (with effect in accordance with Sch. 1 para. 4(2) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 4(1)

F43 Words in Sch. 28 paras. 22C, 22D substituted by S.I. 2006/207, reg. 14(3)(ea) (as inserted (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 33(3)(c)(4) (with Sch. 1 para. 33(5))

[F44 Drawdown pension year and basis amount for drawdown pension year] U.K.

Textual Amendments

F44 Sch. 28 para. 23 cross-heading substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 17(4)

23 (1) [F45 “Drawdown pension year”] means— U.K.

(a) the period of 12 months beginning with the day on which the dependant first becomes entitled to [F46 dependants' drawdown pension] in respect of the arrangement, and

(b) each succeeding period of 12 months.

[F47 This is subject to paragraph 24B.]

[F48 (2) The drawdown pension year in which the dependant dies is the last drawdown pension year and ends immediately before the dependant's death.]

Textual Amendments

F45 Words in Sch. 28 para. 23(1) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 17(2)(a)

F46 Words in Sch. 28 para. 23(1)(a) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 17(2)(b)

F47 Words in Sch. 28 para. 23(1) inserted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 17(2)(c)

F48 Sch. 28 para. 23(2) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 17(3)

Modifications etc. (not altering text)

C4 Sch. 28 para. 23(1) modified (6.4.2006) by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), arts. 1(1), 30(1)(2)(4)

C5 Sch. 28 para. 23(1)(a) modified (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 100(2)

C6 Sch. 28 para. 23(1)(a) modified (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 97(2)

C7 Sch. 28 para. 23(2) modified (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 3 para. 2(1)(2)(d)(ii) (with Sch. 2 para. 2(1))

24 [F49 (A1) This paragraph applies in relation to drawdown pension years beginning on or before the dependant's 75th birthday. U.K.

(1) Subject as follows, the period of three drawdown pension years beginning with the first drawdown pension year, and each succeeding period of three drawdown pension years, is a “reference period”.

(1ZA) But the reference period in which the dependant reaches the age of 75 ends with the drawdown pension year in which the dependant reaches that age.]

[F50 (1A) Sub-paragraph (1B) applies if, at any time during a reference period (“the current reference period”), the dependant notifies the scheme administrator that the dependant wishes a new reference period to begin on the next day that is an anniversary of the reference date in relation to the current reference period.

(1B) The scheme administrator may determine—

(a) that the current reference period is to end immediately before that day (so that sub-paragraph (1) no longer applies), and

(b) that (subject to [F51 sub-paragraph (1ZA) and] any further operation of this sub-paragraph) the period of [F52 three drawdown pension years] beginning with that day, and each succeeding period of [F52 three drawdown pension years], is to be a reference period.

(1C) The first day of each reference period is, in relation to that period, “the reference date”.]

(2) For the first [F53 drawdown pension year] falling within a reference period, the basis amount is the annual amount of the relevant annuity which could have been purchased by the application of the sums and assets representing the [F54 dependant's drawdown pension fund] on the nominated date (but subject to sub-paragraph (5)).

(3) “The nominated date”—

(a) in relation to the first reference period, is the reference date, and

(b) in relation to any subsequent reference period, is such day, within the period of 60 days ending with the reference date, as is nominated by the scheme administrator (or if no day is nominated by the scheme administrator, is the reference date).

(4) For each other [F55 drawdown pension year] falling within a reference period, the basis amount is the annual amount of the relevant annuity which could have been purchased by the application of the sums and assets representing the [F56 dependant's drawdown pension fund]—

(a) if there has been no recent annuity purchase[F57 , recent additional fund designation or recent pension sharing event], on the nominated date, and

(b) otherwise, immediately after the last annuity purchase[F58 , additional fund designation or pension sharing event],

(but subject to sub-paragraph (5)).

(5) On the occasion of each additional fund designation during [F59 a drawdown pension year], the basis amount for [F60 that drawdown pension year] is to be recalculated in accordance with sub-paragraph (6).

(6) The basis amount for the [F61 drawdown pension year] is the annual amount of the relevant annuity which could have been purchased by the application of the sums and assets representing the [F62 dependant's drawdown pension fund] immediately after the additional fund designation.

[F63 (6A) But sub-paragraph (5) does not apply where the operation of that sub-paragraph in relation to an additional fund designation during a drawdown pension year would reduce the basis amount for that drawdown pension year.]

(7) “Annuity purchase” means the purchase of a dependants' scheme pension or dependants' annuity by the application of sums or assets representing the whole or part of the [F64 dependant's drawdown pension fund].

(8) “Additional fund designation” means the designation under the arrangement of further [F65 sums or assets] held for the purposes of the arrangement as available for the payment of [F66 dependants' drawdown pension] to the dependant.

[F67 (8A) “Pension sharing event” means the coming into operation of a pension sharing order or provision relating to the sums and assets representing the [F68 dependant's drawdown pension fund].]

(9) An annuity purchase[F69 , additional fund designation or pension sharing event] is “recent” if it took place during the period—

(a) beginning with the reference date, and

(b) ending with the last day of the immediately preceding [F70 drawdown pension year].

(10) Paragraph 14 defines “relevant annuity”.

F71 (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F49 Sch. 28 para. 24(1)(1ZA)(A1) substituted for Sch. 28 para. 24(1) (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(2)

F50 Sch. 28 para. 24(1)-(1C) substituted (19.7.2007) for Sch. 28 para. 24(1) (with effect in accordance with Sch. 20 para. 24(5) of the amending Act) by Finance Act 2007 (c. 11), Sch. 20 para. 8(3)

F51 Words in Sch. 28 para. 24(1B)(b) inserted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(3)(a)

F52 Words in Sch. 28 para. 24(1B)(b) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(3)(b)

F53 Words in Sch. 28 para. 24(2) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(4)(a)

F54 Words in Sch. 28 para. 24(2) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(4)(b)

F55 Words in Sch. 28 para. 24(4) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(4)(a)

F56 Words in Sch. 28 para. 24(4) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(4)(b)

F57 Words in Sch. 28 para. 24(4)(a) substituted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 22(2)(a), 64(1)

F58 Words in Sch. 28 para. 24(4)(b) substituted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 22(2)(b), 64(1)

F59 Words in Sch. 28 para. 24(5) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(5)(a)

F60 Words in Sch. 28 para. 24(5) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(5)(b)

F61 Words in Sch. 28 para. 24(6) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(6)(a)

F62 Words in Sch. 28 para. 24(6) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(6)(b)

F63 Sch. 28 para. 24(6A) inserted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(7)

F64 Words in Sch. 28 para. 24(7) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(8)

F65 Words in Sch. 28 para. 24(8) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(9)(a)

F66 Words in Sch. 28 para. 24(8) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(9)(b)

F67 Sch. 28 para. 24(8A) inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 22(3), 64(1)

F68 Words in Sch. 28 para. 24(8A) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(10)

F69 Words in Sch. 28 para. 24(9) substituted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 22(4), 64(1)

F70 Words in Sch. 28 para. 24(9)(b) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 18(11)

F71 Sch. 28 para. 24(11) omitted (6.4.2015) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 32(1)(e)(iv)(4)

Modifications etc. (not altering text)

C8 Sch. 28 para. 24 modified (6.4.2006) by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), arts. 1(1), 3, 5(1)(3)

C9 Sch. 28 para. 24 modified (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 98(2)(b)

C10 Sch. 28 para. 24(4) applied (with modifications) (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 98(7)

C11 Sch. 28 para. 24(7)-(8A) modified (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 98(8)

[F72 24A (1) This paragraph applies in relation to drawdown pension years beginning after the dependant's 75th birthday. U.K.

(2) For each drawdown pension year beginning after the dependant reached the age of 75, the basis amount is the annual amount of the relevant annuity which could have been purchased by the application of the sums and assets representing the dependant's drawdown pension fund on the nominated date.

(3) “The nominated date” is such day within the period of 60 days ending with the first day of the drawdown pension year as is nominated by the scheme administrator (or, if no day is nominated by the scheme administrator, is the first day of that year).

(4) On the occasion of each additional fund designation during a drawdown pension year, the basis amount of that drawdown pension year is to be recalculated in accordance with sub-paragraph (5).

(5) The basis amount for the drawdown pension year is the annual amount of the relevant annuity which could have been purchased by the application of the sums and assets representing the dependant's drawdown pension fund immediately after the additional fund designation.

(6) But sub-paragraph (4) does not apply where the operation of that sub-paragraph in relation to an additional fund designation during a drawdown pension year would reduce the basis amount for that drawdown pension year.

(7) “Additional fund designation” has the meaning given by paragraph 24(8).

(8) Paragraph 14 defines “relevant annuity”.

F73 (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F72 Sch. 28 paras. 24A, 24B inserted (with effect in accordance with Sch. 16 paras. 85, 99(3) of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 19

F73 Sch. 28 para. 24A(9) omitted (6.4.2015) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 32(1)(e)(v)(4)

24B (1) This paragraph applies if the dependant has reached the age of 75. U.K.

(2) Sub-paragraph (3) applies if, at any time during a drawdown pension year in respect of an arrangement (“the current drawdown pension year”), the dependant notifies the scheme administrator that the dependant wishes the drawdown pension year following the current drawdown pension year to begin on the day on which the next drawdown pension year in respect of another arrangement relating to the dependant under the pension scheme (including any arrangement relating to that person as a member of the scheme) will begin.

(3) The scheme administrator may determine—

(a) that the current drawdown pension year is to end immediately before that day, and

(b) that the period of 12 months beginning with that day, and each succeeding period of 12 months, is a drawdown pension year in respect of the arrangement.

(4) The scheme administrator may not make a determination under this paragraph more than once in relation to the same arrangement.]

Textual Amendments

F72 Sch. 28 paras. 24A, 24B inserted (with effect in accordance with Sch. 16 paras. 85, 99(3) of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 19

Minimum income requirement U.K.

F74 24C U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74 Sch. 28 paras. 24C-24G omitted (6.4.2015) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 32(1)(e)(vi)(4)

F74 24D U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74 Sch. 28 paras. 24C-24G omitted (6.4.2015) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 32(1)(e)(vi)(4)

The relevant day U.K.

F74 24E U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74 Sch. 28 paras. 24C-24G omitted (6.4.2015) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 32(1)(e)(vi)(4)

Relevant contributions U.K.

F74 24F U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74 Sch. 28 paras. 24C-24G omitted (6.4.2015) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 32(1)(e)(vi)(4)

Valid and accepted declarations U.K.

F74 24G U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74 Sch. 28 paras. 24C-24G omitted (6.4.2015) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 32(1)(e)(vi)(4)

Dependant’s alternatively secured pension fund U.K.

F75 25 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F75 Sch. 28 paras. 25-27 omitted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 16 para. 78(d)

Alternatively secured pension year and basis amount for alternatively secured pension year U.K.

F75 26 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F75 Sch. 28 paras. 25-27 omitted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 16 para. 78(d)

F75 27 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F75 Sch. 28 paras. 25-27 omitted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 16 para. 78(d)