http://www.legislation.gov.uk/id/ukpga/2004/12

Part 4Pension schemes etc

Chapter 7Compliance

F1Relief from liability in respect of returned unauthorised member payments

266AMember's liability

(1)

This section applies where—

(a)

a liability to the unauthorised payments charge, or to both the unauthorised payments charge and the unauthorised payments surcharge, has arisen in respect of an unauthorised member payment, and

(b)

property or money is transferred, or a sum paid, towards a registered pension scheme pursuant to F2a relevant order as a result of the unauthorised member payment.

(2)

The member of the registered pension scheme to or in respect of whom the unauthorised member payment was made (or, if it was paid after his death, the recipient) may claim relief from—

(a)

the relevant proportion of the unauthorised payments charge, and

(b)

if a liability to the unauthorised payments surcharge has arisen and subsection (4) is satisfied, the relevant proportion of the unauthorised payments surcharge.

(3)

The claim must be made within the period of one year beginning with the day on which the property or money is transferred, or the sum paid.

(4)

This subsection is satisfied if no part of the unauthorised member payment and no asset or sum representing it—

(a)

has been received by (or on behalf of) the member or a person connected with the member, or

(b)

has been held for more than 180 days by a person or succession of persons, other than the member or a person connected with the member, involved in any transaction by which the unauthorised member payment was made.

(5)

The relevant proportion of the unauthorised payments charge or the unauthorised payments surcharge is—

\frac{ASO}{UMP}

where—

ASO is the amount subject to the F3relevant order, that is the aggregate of the market value of any property and the amount of any money transferred, or the amount of the sum paid, towards a registered pension scheme pursuant to the F4relevant order in respect of the unauthorised member payment, and

UMP is the amount of the unauthorised member payment.

(6)

But if ASO is greater than UMP, the relevant proportion of the unauthorised payments charge or the unauthorised payments surcharge is the whole of it.

F5(6A)

In this section “relevant order” means an order under any of the following—

(a)

section 16(1), 19(4) or 21(2)(a) of the Pensions Act 2004 (orders for money etc to be restored to pension schemes), or

(b)

Article 12(1), 15(4) or 17(2)(a) of the Pensions (Northern Ireland) Order 2005 (corresponding provision for Northern Ireland).

F6(7)

For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.