The Registered Pension Schemes (Provision of Information) (Amendment) Regulations 2017

Statutory Instruments

2017 No. 11

Income Tax

The Registered Pension Schemes (Provision of Information) (Amendment) Regulations 2017

Made

10th January 2017

Laid before the House of Commons

12th January 2017

Coming into force

6th February 2017

The Commissioners for Her Majesty’s Revenue and Customs make the following Regulations in exercise of the powers conferred by section 251 of the Finance Act 2004(1) and now exercisable by them(2), and section 282(A1) of that Act(3).

Citation, commencement and effect

1.—(1) These Regulations may be cited as the Registered Pension Schemes (Provision of Information) (Amendment) Regulations 2017 and come into force on 6th February 2017.

(2) The amendments in regulation 3 have effect in relation to—

(a) payments of lump sum death benefits made by registered pension schemes to trustees on or after 6th April 2016, and

(b) payments made by trustees to beneficiaries out of sums to which sub-paragraph (a) applies.

(3) The amendments in regulations 4 and 5 have effect for the tax year 2016-17 and subsequent years.

Amendment of the Registered Pension Schemes (Provision of Information) Regulations 2006

2.  The Registered Pension Schemes (Provision of Information) Regulations 2006(4) are amended as follows.

3.  After regulation 10 insert—

“Death: provision of information by scheme administrator to trustee

10A.— (1) Where—

(a) a registered pension scheme makes a payment of a sum on whose payment tax has been charged under section 206, and

(b) the payment is made to a trustee who is not a bare trustee,

the scheme administrator shall provide to the trustee the information specified in paragraph (2).

(2) The information required is—

(a) the amount of the lump sum death benefit on which tax has been charged under section 206,

(b) the amount of that tax charge,

(c) the name and pension scheme tax reference number of the registered pension scheme making the payment, and

(d) the name, date of birth and date of death of the member of the registered pension scheme in respect of whom the lump sum death benefit is paid.

(3) The scheme administrator shall provide the information specified in paragraph (2) to the trustee before—

(a) the end of 30 days beginning with the date of the payment to the trustee, or

(b) if later, the end of 8th March 2017.

(4) In paragraph (1) “bare trustee” has the meaning given by section 206(10)(5).

Death: provision of information by trustee to beneficiary

10B.— (1) Where—

(a) a trustee who is not a bare trustee makes a payment out of a sum on whose payment tax has been charged under section 206, and

(b) the payment is made out of a settlement to a beneficiary who is an individual,

the trustee shall provide to the beneficiary the information specified in paragraph (2).

(2) The information required is—

(a) the total of—

(i) the sum paid to the beneficiary, and

(ii) the amount of tax that has been charged in respect of that sum under section 206,

(b) the amount of tax that has been charged under section 206 in respect of the sum paid to the beneficiary,

(c) the name and pension scheme tax reference number of the registered pension scheme which paid the lump sum death benefit, and

(d) the name, date of birth and date of death of the member of the registered pension scheme in respect of whom the lump sum death benefit was paid.

(3) The trustee shall provide the information specified in paragraph (2) to the beneficiary before the latest of the following—

(a) the end of 30 days beginning with the date of the payment to the beneficiary,

(b) the end of 30 days beginning with the date of the receipt by the trustee of the information required to be provided by the scheme administrator under regulation 10A, and

(c) the end of 8th March 2017.

(4) In paragraph (1) “bare trustee” has the meaning given by section 206(10).”.

4.  In regulation 14A(1A) (annual allowance: annual provision of information by scheme administrator to member for tax year 2015-16)(6)—

(a) in paragraph (d) for “and (10)(d)” substitute “, (10)(d) and (10)(e)”,

(b) insert “and” at the end of paragraph (d), and

(c) omit paragraph (f) and the “and” at the end of paragraph (e).

5.  In regulation 14A(12) (meaning of unadjusted alternative annual allowance)(7) after “preceding 3 years)” insert “and any reductions under section 228ZA(8) (tapered reduction of annual allowance: high-income individual)”.

Edward Troup

Ruth Owen

Two of the Commissioners for Her Majesty’s Revenue and Customs

10th January 2017

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Registered Pension Schemes (Provision of Information) Regulations 2006 (S.I. 2006/567) (“the 2006 Regulations”) which concern the provision of information by persons such as members and scheme administrators of registered pension schemes.

Regulation 1(2) provides that the information requirements imposed by regulation 3 have effect in relation to payments of lump sum death benefits made by registered pension schemes to trustees on or after 6th April 2016. Regulation 1(3) provides that the amendments made by regulations 4 and 5 have effect for the tax year 2016-17 and subsequent years. Power to make legislation with retrospective effect is contained in section 282(A1) of the Finance Act 2004 (c. 12), which allows regulations made under Part 4 of that Act (including under section 251) to include provision having effect in relation to times before they were made if the provision does not increase any person’s liability to tax.

Regulation 3 inserts new regulations 10A and 10B into the 2006 Regulations. Regulation 10A imposes information requirements on a pension scheme administrator when a lump sum death benefit payment is made to a trustee in specified circumstances. Regulation 10B imposes information requirements on a trustee when making an onwards payment to an individual of part or all of that sum. The information that is provided by the scheme administrator to a trustee and passed on by a trustee to an individual, will enable an individual to submit a repayment claim to Her Majesty’s Revenue and Customs in those cases in which the amount deducted in respect of the special lump sum death benefit charge exceeds the tax that would have been paid by the individual at their marginal rate of tax.

Regulations 4 and 5 make minor technical changes to regulation 14A of the 2006 Regulations.

A Tax Information and Impact Note covering regulation 3 of this instrument was published on 8th July 2015 as part of the Summer Budget 2015 and is available on the government website at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/443242/5013_Taxation_of_lump_sum_death_benefits.pdf. It remains an accurate summary of the impacts that apply to regulation 3. A Tax Information and Impact Note has not been prepared for regulations 4 and 5 of this instrument as they contain no substantive changes to tax policy.

(1)

2004 c. 12; section 251(4) was amended by paragraph 47 of Schedule 10 to the Finance Act 2005 (c. 7), paragraph 93 of Schedule 1 to the Taxation of Pensions Act 2014 (c. 30) and section 21(6) of the Finance (No. 2) Act 2015 (c. 33), section 251(5)(aa) was inserted by section 49 of the Finance Act 2010 (c. 13) and section 251(6) was amended by paragraph 93 of Schedule 1 to the Taxation of Pensions Act 2014.

(2)

The functions of the Commissioners of Inland Revenue were transferred to the Commissioners for Her Majesty’s Revenue and Customs by section 5(1) of the Commissioners for Revenue and Customs Act 2005 (c. 11). Section 50(1) of that Act provides that insofar as it is appropriate in consequence of section 5, a reference in an enactment, however expressed, to the Commissioners of Inland Revenue is to be treated as a reference to the Commissioners for Her Majesty’s Revenue and Customs.

(3)

Section 282(A1) was inserted by section 75(1) of the Finance Act 2009 (c. 10).

(4)

S.I. 2006/567, amended by S.I. 2011/1797 and 2016/308 and paragraph 88 of Schedule 1 to the Taxation of Pensions Act 2014; there are other amendments not relevant to these Regulations.

(5)

Section 206(10) was inserted by section 21(5) of the Finance (No. 2) Act 2015.

(6)

Regulation 14A was inserted by S.I. 2011/1797. Paragraph (1A) was inserted by S.I. 2016/308.

(7)

Paragraph (12) was inserted by paragraph 88 of Schedule 1 to the Taxation of Pensions Act 2014.

(8)

Section 228ZA was inserted by paragraph 10 of Schedule 4 to the Finance (No. 2) Act 2015.