The Taxation of Pension Schemes (Consequential Amendments) (No. 2) Order 2006

Explanatory Note

(This note is not part of the Order)

This Order provides consequential amendments to section 408 of the Income Tax (Earnings and Pensions) Act 2003, section 128 of the Finance Act 1995 and section 336 of the Income and Corporation Taxes Act 1988.

Article 1 provides for citation and commencement.

Article 2 provides that section 408(1) of the Income Tax (Earnings and Pensions) Act 2003 shall be amended to insert a reference to an employer-financed retirement benefit scheme

Article 3 provides that section 128 of the Finance Act 1995 shall be amended to remove the references to section 605 of the Income Tax (Earnings and Pensions Act) 2003 and replacing that reference with one to annuity contracts to which section 605 applied before 6 April 2006 and which fall within paragraph 1(1)(f) of Schedule 36 to the Finance Act 2004 (“the 2004 Act”). Section 605 was repealed by paragraphs 1 and 7 of Schedule 31 to the 2004 Act but continues to have effect until 5 April 2007.

Article 4 removes a reference to annuity contracts in section 336 of the Income and Corporation Taxes Act 1988 (c. 1) and replaces it with a reference to annuities made under registered pension schemes which fall within paragraph 1(1)(f) of Schedule 36. The consequential amendment made by paragraph 13 of Schedule 35 to the 2004 Act excluded annuities under a trust scheme or substituted contract and extended the provision to other annuity contracts.

This Order does not impose any new costs on business.