Explanatory Note
(This note is not part of the Order)
Section 632B of the Income and Corporation Taxes Act 1988 (“section 632B” and “the Taxes Act”) makes provision to allow a member of both a personal pension scheme and an approved retirement benefits scheme mentioned in section 645(3)(c) of the Taxes Act to make contributions to both schemes, in circumstances where the member’s earnings for the whole of a year of assessment are entirely from pensionable employment (earnings from pensionable employment is defined in section 645 of the Taxes Act). A member of both an approved retirement benefits scheme and a personal pension scheme who has a separate source of non-pensionable earnings, or who received earnings from pensionable employment for only part of a year of assessment, would be eligible to make contributions to a personal pension scheme under section 632A of the Taxes Act (and in these circumstances, section 632B does not apply).
There is an annual limit in section 632B on contributions to the personal pension scheme of £3,600 in each year of assessment, exclusions of “controlling directors” and limits on the remuneration levels of persons who can be contributors.
Article 2 of this Order defines “remuneration” for the purposes of section 632B.
Article 3 sets out the calculation of a person’s “grossed-up remuneration” for the purpose of calculating the remuneration limits.
Article 4 sets out details of the certificate which a member of a personal pension scheme, who claims to be eligible to make contributions under section 632B, has to give to the scheme administrator, before or when making the first such contribution in a year of assessment. That certificate, in conjunction with section 632B(1)(d), will enable the remuneration limit to be satisfied for the five years of assessment which succeed “the qualifying year” (subject to being superseded by another certificate).