SCHEDULES

C1C2SCHEDULE 36Pension schemes etc: transitional provisions and savings

Annotations:
Modifications etc. (not altering text)
C1

Sch. 36 modified by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), art. 23D (as inserted (1.6.2009) by S.I. 2009/1172, arts. 1, 3)

Part 4Other provisions

Benefits taxable under Chapter 2 of Part 6 of ITEPA 2003: contributions taxed pre-commencement

54

1

This paragraph has effect if—

a

all of the income and gains accruing to the scheme are brought into charge to tax and the lump sum is provided to the employee, a relative of the employee, the personal representatives of the employee, an ex-spouse F1or former civil partner of the employee or any other individual designated by the employee, or

b

the scheme was entered into before F51st December 1993 and has not been varied on or after that date with a view to the provision of benefits under the scheme.

2

In a case where the employer has not paid any sum or sums with a view to the provision of benefits under the scheme since before 6th April 2006, section 394 of ITEPA 2003 (charge on benefits from non-approved schemes) does not apply in relation to the lump sum.

3

In a case where the employer has paid any sum or sums with a view to the provision of benefits under the scheme on or after 6th April 2006—

a

section 394 of ITEPA 2003 does not apply in relation to so much of the lump sum as does not exceed the appropriate fraction of the amount of the market value of the assets of the scheme on 5th April 2006 as increased under sub-paragraph (4), and

b

only any sum or sums paid by the employee after that date with a view to the provision of benefits under the scheme is or are to be taken into account under section 395 of ITEPA 2003 (general rules).

4

For the purposes of sub-paragraph (3)(a)—

a

“the appropriate fraction” of the amount of the market value of the assets of the scheme on 5th April 2006 is the same fraction as the fraction of the assets of the scheme to which the employee would have been entitled had the scheme been wound up on that date, and

b

the amount of the market value of the assets of the scheme on that date is to be increased by the percentage by which the retail prices index for the month in which the lump sum is provided is greater than that for April 2006.

5

In this paragraph—

  • “ex-spouse”, in relation to an employee, means the other party to a marriage with the employee that has been dissolved or annulled, and

  • F2“former civil partner”, in relation to an employee, means the other party to a civil partnership with the employee that has been dissolved or annulled,

  • “relative”, in relation to an employee, means—

    1. a

      the F3spouse or civil partner of the employee,

    2. b

      the widow or widower F4or surviving civil partner of the employee,

    3. c

      a child of the employee, or

    4. d

      a dependant of the employee.