Restriction on discretion to approve: controlling directors' death benefits
10.—(1) The restriction imposed by this regulation is that the accumulated value must be applied, after the death of a controlling director, in accordance with paragraph (3) or (4).
(2) In this regulation “the accumulated value” means the total of—
(a)the conversion payment; and
(b)any sum attributable to growth through investment of the conversion payment.
(3) If the controlling director has died before any benefits have been paid to him under the arrangements represented by the accumulated value, the accumulated value must be applied—
(a)wholly to secure the payment of an annuity which satisfies the conditions in section 636 (annuity after death of member)(1);
(b)to secure the payment of income withdrawals with respect to which the conditions in section 636A (income withdrawals after death of member)(2) are satisfied and, as to any amount not used for that purpose, to secure the payment of such an annuity as is referred to in sub-paragraph (a); or
(c)as to not more than 25 per cent., to secure the payment of a lump sum and, as to the balance, to secure the payment of such an annuity as is referred to in sub-paragraph (a) or of such income withdrawals and annuity as are referred to in sub-paragraph (b).
This paragraph is subject to the qualification in paragraph (4).
(4) If the administrator of a personal pension scheme is satisfied, having taking all reasonable steps—
(a)that there is no surviving spouse to whom an annuity referred to in paragraph (3)(a), or income withdrawals referred to in paragraph (3)(b), can be paid; and
(b)if the arrangement so requires, that there is no dependant to whom such an annuity or income withdrawals can be paid;
the whole of the accumulated value may be applied to secure the payment of a lump sum.
Section 636 was amended by paragraph 1 of Schedule 11 to the Finance Act 1995 and paragraph 13 of Schedule 10 to the Finance Act 1999.
Section 636A was inserted by paragraph 1 of Schedule 11 to the Finance Act 1995 and amended by paragraph 14 of Schedule 10 to the Finance Act 1999 and paragraph 12 of Schedule 13 to the Finance Act 2000.