Part 4Pension schemes etc

Chapter 3Payments by registered pension schemes

Unauthorised member payments

173Benefits

(1)

A registered pension scheme is to be treated as having made an unauthorised payment to a F1person who is or has been a member of the pension scheme if an asset held for the purposes of the pension scheme is used to provide a benefit (other than a payment) to—

(a)

the F2person, or

(b)

a member of the F3person's family or household.

(2)

If the benefit is received by reason of an employment which is not F4lower-paid employment as a minister of religion, subsection (1) does not apply.

(3)

If the benefit is received by reason of F5an employment which is lower-paid employment as a minister of religion, subsection (1) only applies if—

(a)

it is a benefit to which Chapter 6 or 10 of the benefits code (cars and vans, and benefits not dealt with elsewhere in benefits code) would apply if the employment were not F6lower-paid employment as a minister of religion,

(b)

the pension scheme is an occupational pension scheme, and

(c)

the F7person, or a member of the F8person's family or household, is a director of, and has a material interest in, a sponsoring employer.

(4)

A registered pension scheme is to be treated as having made an unauthorised payment in respect of a F9person who is or has been a member of the pension scheme if, after the F10person's death, an asset held for the purposes of the pension scheme is used to provide a benefit (other than a payment) to a person who, at the date of the F10person's death, was a member of the F10person's family or household.

(5)

The person who receives the benefit is to be treated as having received the unauthorised payment.

(6)

If the benefit is received by reason of an employment which is not F11lower-paid employment as a minister of religion, subsections (4) and (5) do not apply.

(7)

If the benefit is received by reason of F12an employment which is lower-paid employment as a minister of religion, subsections (4) and (5) only apply if—

(a)

paragraphs (a) and (b) of subsection (3) apply, and

(b)

at the date of the F13person's death the F14person, or a member of the F13person's family or household, was a director of, and had a material interest in, a sponsoring employer.

F15(7A)

This section does not apply if—

(a)

the pension scheme is an investment-regulated pension scheme, and

(b)

the asset consists of taxable property.

(8)

The amount of an unauthorised payment treated as having been made by this section—

(a)

in relation to such benefits, and in such circumstances, as may be prescribed by regulations made by the Board of Inland Revenue, is an amount determined in accordance with the regulations, and

(b)

otherwise, is the amount which would be the cash equivalent of the benefit under the benefits code if the benefit were received by reason of an employment and the benefits code applied to it.

(9)

For the purposes of subsection (8)—

(a)

references in the benefits code to the employee are to be treated as references to the F16person who is or has been a member, and

(b)

references in the benefits code to the employer are to be treated as references to the pension scheme.

(10)

In this section—

“the benefits code” has the meaning given by section 63(1) of ITEPA 2003,

“director” has the meaning given by section 67 of that Act,

F17“lower-paid employment as a minister of religion” has the meaning given by section 290D of that Act, and

“material interest” has the meaning given by section 68 of that Act.

(11)

Section 721 of ITEPA 2003 applies for the purposes of determining the members of a person’s family or household.