The Special Annual Allowance Charge (Application to Members of Currently-Relieved Non-UK Pension Schemes) Order 2009

Modifications of Schedule 35

4.—(1) In paragraph 3 of Schedule 35 the calculation of the total adjusted pension input amount for members of currently-relieved non-UK pension schemes shall be arrived at with the following modifications.

(2) Section 230(1) and 234(1) of FA 2004 (cash balance and defined benefits arrangements) shall apply as if the increase in the value of the individual’s rights under an arrangement under the pension scheme relating to the individual during the tax year were the greater of—

(a) the appropriate fraction of what it otherwise would be (see paragraph (3)); and

(b) the amount of any contributions paid under the arrangement during the tax year by or on behalf of the individual (otherwise than by an employer) in respect of which relief is given by virtue of—

(i) Schedule 33 to FA 2004 (overseas pensions schemes: migrant member relief),

(ii) paragraph 51 of Schedule 36 to FA 2004 (individuals with pre-commencement entitlement to corresponding relief), or

(iii) double tax arrangements,

and section 237 of FA 2004 (hybrid arrangements) shall apply accordingly.

(3) The appropriate fraction referred to in paragraph (2)(a) is—

where—

EI is the total amount of employment income of the individual from any relevant employment or employments for the tax year, excluding any such income which is exempt income (within the meaning of section 8 of ITEPA 2003), and

TE is so much of EI as constitutes taxable earnings from any such employment (within the meaning of section 10(2) of ITEPA 2003).

(4) For the purposes of paragraph (3) an employment is a relevant employment if it is an employment with an employer who is a sponsoring employer in relation to the currently-relieved non-UK pension scheme.

(5) Section 233(1) of FA 2004 (other money purchase arrangements) shall apply as if—

(a) the reference in section 233(1)(a) of FA 2004 to relievable pension contributions paid by or on behalf of the individual under an arrangement under the pension scheme relating to the individual were to those in respect of which relief from tax is given by virtue of—

(i) Schedule 33 to FA 2004 (overseas pensions schemes: migrant member relief),

(ii) paragraph 51 of Schedule 36 to FA 2004 (individuals with pre-commencement entitlement to corresponding relief), or

(iii) double tax arrangements; and

(b) the reference in section 233(1)(b) of FA 2004 to contributions paid in respect of the individual under such an arrangement by an employer of the individual were to the appropriate fraction of the contributions so paid (as to which see paragraph (6)),

and section 237 of FA 2004 shall apply accordingly.

(6) The appropriate fraction referred to in paragraph (5)(b) is—

where—

EI is the total amount of employment income of the individual from any employment or employments with the employer for the tax year, excluding any such income which is exempt income (within the meaning of section 8 of ITEPA 2003), and

TE is so much of EI as constitutes taxable earnings from any such employment (within the meaning of section 10(2) of ITEPA 2003).