(1) A charge to income tax, to be known as the de-registration charge, arises where the registration of a registered pension scheme is withdrawn.
(2) The liability to the de-registration charge is a liability of the person who was, or each of the persons who were, the scheme administrator immediately before the registration was withdrawn.
(3) That person, or each of those persons, is liable to the de-registration charge whether or not—
(a) that person, and
(b) any other person who is liable to the de-registration charge,
are resident ... ... in the United Kingdom.
(4) The de-registration charge is a charge at the rate of 40% in respect of the aggregate of—
(a) the amount of any sums held for the purposes of the pension scheme immediately before it ceased to be a registered pension scheme, and
(b) the market value at that time of any assets held for the purposes of the pension scheme.
(5) The Treasury may by order amend subsection (4) so as to vary the rate of the de-registration charge.
(6) An order under subsection (5) may make provision for there to be different rates in different circumstances.
(1) For the purposes of this Chapter, the “UK-relieved funds” of a non-UK registered scheme are sums or assets held for the purposes of, or representing accrued rights under, the scheme—
(a) that (directly or indirectly) represent sums or assets that at any time were held for the purposes of, or represented accrued rights under, a registered pension scheme established in the United Kingdom,
(b) that (directly or indirectly) represent sums or assets that at any time formed the UK tax-relieved fund under a relevant non-UK scheme of a relieved member of that scheme, or
(c) that—
(i) are held for the purposes of, or represent accrued rights under, an arrangement under the scheme relating to a member of the scheme who on any day has been an accruing member of the scheme, and
(ii) in accordance with regulations made by the Commissioners for Her Majesty's Revenue and Customs, are to be taken to have benefited from relief from tax.
(2) In this Chapter “relevant contribution” has the meaning given by regulation 14ZB(8) of the Information Regulations.
(3) Paragraphs (7) and (8) of regulation 14ZB of the Information Regulations (meaning of “accruing member”) apply for the purposes of this section as for those of that regulation.
(4) “The Information Regulations” means the Registered Pension Schemes (Provision of Information) Regulations 2006 (S.I. 2006/567).
242C Application of this Part to non-UK registered schemes
(1) This Part (so far as would not otherwise be the case) is to be read—
(a) as applying in relation to UK-relieved funds of a non-UK registered scheme as it applies in relation to sums or assets held for the purposes of, or representing accrued rights under, a registered pension scheme established in the United Kingdom,
(b) as applying in relation to a non-UK registered scheme, so far as the scheme relates to the scheme's UK-relieved funds, as it applies in relation to a registered pension scheme established in the United Kingdom,
(c) as applying in relation to members of a non-UK registered scheme, so far as their rights under the scheme are represented by UK-relieved funds of the scheme, as it applies in relation to members of a registered pension scheme established in the United Kingdom, and
(d) as applying to relevant contributions to a non-UK registered scheme as it applies in relation to contributions to a registered pension scheme established in the United Kingdom.
(2) Subsection (1) has effect subject to, and in accordance with, the following provisions of this Chapter.
(3) The Commissioners for Her Majesty's Revenue and Customs may by regulations make—
(a) provision elucidating the application of, or supplementing, subsection (1) or other provisions of this Chapter, or
(b) where relief from tax is involved, other provision for or in connection with the application of this Part where the interpretative presumption against extra-territorial application means that it would otherwise not apply.
(4) Regulations under subsection (3) may (in particular)—
(a) amend provisions of or made under—
(i) this Part, or
(ii) any other enactment related to taxation in connection with pensions, and
(b) make consequential amendments of provisions of, or made under, any enactment.
(5) See section 242B for the meaning of “UK-relieved funds” and “relevant contribution”.
(1) This section is about the application of the provisions of this Part relating to the annual allowance charge.
(2) Pension input amounts in respect of arrangements relating to an individual under a non-UK registered scheme are to be taken into account in applying the provisions for a tax year in relation to the individual only if, in accordance with regulations made by the Commissioners for Her Majesty's Revenue and Customs, relieved inputs are to be taken to have been made in respect of the individual under the scheme in the year.
For the purposes of the application of the taxable property provisions in relation to a non-UK registered scheme, property is taxable property in relation to the scheme if it would be taxable property in relation to the scheme were the scheme a registered pension scheme established in the United Kingdom.
244 Non-UK schemes: application of certain charges
Schedule 34 contains provision applying certain charges under this Part , and under Part 9 of ITEPA 2003 (pension income), in relation to non-UK schemes.
A charge to income tax, to be known as the overseas transfer charge, arises under the following sections—
(a) section 244AC (overseas transfer charge: transfers where no exclusion applies);
(b) section 244IA (overseas transfer charge: transfers exceeding available allowance).
(1) In this section and in sections 244AC to 244N—
“former QROPS” means a scheme that has at any time been a QROPS;
“onward transfer” means (subject to subsection (3)) a transfer of sums or assets held for the purposes of, or representing accrued rights under, an arrangement under a QROPS or a former QROPS in relation to a member so as to become held for the purposes of, or to represent rights under, an arrangement under another QROPS in relation to that person as a member of that other QROPS;
“original transfer”, in relation to an onward transfer, means (subject to subsection (3))—
the recognised transfer or relieved relevant non-UK scheme transfer in respect of which the following conditions are met—
it is from a registered pension scheme or a relieved relevant non-UK scheme to a QROPS,
the sums and assets transferred by the onward transfer directly or indirectly derive from those transferred by it, and
it is more recent than any other recognised transfer or relieved relevant non-UK scheme transfer in respect of which the conditions in sub-paragraphs (i) and (ii) are met, or
where there is no such recognised transfer or relieved relevant non-UK scheme transfer, the relevant transfer (see paragraph 1(6) of Schedule 34) in respect of which the following conditions are met—
it is from a relevant non-UK scheme (see paragraph 1(5) of Schedule 34),
it is a transfer of the whole or part of the UK tax-relieved fund (see paragraph 3 of Schedule 34) of a member of the scheme,
it is to a QROPS, and
the sums and assets transferred by the onward transfer directly or indirectly derive from those transferred by it;
“QROPS” means a qualifying recognised overseas pension scheme;
“recognised transfer” has the meaning given by section 169;
“the relevant period” means—
in the case of a recognised transfer or a relieved relevant non-UK scheme transfer made on 6 April in any year, the five years beginning with the date of that transfer,
in the case of any other recognised transfer or relieved relevant non-UK scheme transfer, the period consisting of the combination of—
the period beginning with the date of the transfer and ending immediately before the next 6 April, and
the five years beginning at the end of that initial period,
in the case of an onward transfer, the period—
beginning with the date of the transfer, and
ending at the end of the relevant period for the original transfer (see paragraphs (a) and (b) or, as the case may be, paragraphs (d) and (e)),
in the case of a relevant transfer that—
is made on 6 April in any year, and
is the original transfer for an onward transfer,
the five years beginning with the date of the relevant transfer, and
in the case of a relevant transfer that—
is made otherwise than on 6 April in any year, and
is the original transfer for an onward transfer,
the period consisting of the combination of: the period beginning with the date of the relevant transfer and ending immediately before the next 6 April; and the five years beginning at the end of that initial period;
“relieved relevant non-UK scheme” means a pension scheme that is a relevant non-UK scheme within the meaning of sub-paragraph (5) of paragraph 1 of Schedule 34 in respect of which at least one of paragraphs (a) to (c) of that sub-paragraph applies;
“relieved relevant non-UK scheme transfer” means a transfer, other than a block transfer, of sums or assets held for the purposes of, or representing accrued rights under, an arrangement under a relieved relevant non-UK scheme in relation to a relieved member of the scheme so as to become held for the purposes of, or to represent rights under, an arrangement under a QROPS in relation to that person as a member of that QROPS;
“ring-fenced transfer fund”, in relation to a QROPS or former QROPS, has the meaning given by paragraph 1 of Schedule 34.
(2) For the purposes of the definition of “relieved relevant non-UK scheme transfer”—
(a) a transfer is “a block transfer” in relation to a member of a pension scheme if it involves the transfer, in a single transaction, of all the sums and assets held for the purposes of, or representing accrued rights under, the arrangements under the scheme which relate to the member and at least one other member of the scheme;
(b) an individual is “a relieved member” of a relieved relevant non-UK scheme if—
(i) any of the contributions in respect of which relief has been given as mentioned in paragraph (a) or (b) of the definition of “relevant non-UK scheme” in paragraph 1(5) of Schedule 34 were contributions paid by or on behalf of, or in respect of, the individual, or
(ii) the individual is the member, or one of the members, who has been exempt from liability to tax as mentioned in paragraph (c) of that definition.
(3) Where, apart from this subsection, there would be different original transfers for different parts of an onward transfer, each such part of the onward transfer is to be treated as a separate onward transfer for the purposes of this section and sections 244AC to 244N.
244AC Overseas transfer charge: transfers where no exclusion applies
(1) The overseas transfer charge arises where—
(a) a transfer within subsection (2) is made to a QROPS, and
(b) the transfer is not excluded from the charge by or under any of sections 244B to 244H.
(2) A transfer to a QROPS is within this subsection if it is—
(a) a recognised transfer,
(b) a relieved relevant non-UK scheme transfer, or
(c) an onward transfer that is made during the relevant period for the original transfer.
(3) Sections 244B to 244H are subject to section 244I (circumstances in which exclusions do not apply).
244B Exclusion: member and receiving scheme in same country
(1) A recognised transfer to a QROPS or a relieved relevant non-UK scheme transfer is excluded from the overseas transfer charge under section 244AC if during the relevant period—
(a) the member is resident in the country or territory in which the QROPS to which the transfer is made is established, and
(b) there is no onward transfer—
(i) for which the recognised transfer is the original transfer or relieved relevant non-UK scheme transfer, and
(ii) which is not excluded from the charge.
(2) If the member is resident in that country or territory at the time of the transfer mentioned in subsection (1), it is to be assumed for the purposes of subsection (1) that the member will be resident in that country or territory during the relevant period; but if, at a time before the end of the relevant period, the transfer ceases to be excluded by subsection (1) otherwise than by reason of the member's death—
(a) that assumption is from that time no longer to be made, and
(b) the charge on the transfer is treated as charged at that time.
(3) An onward transfer to a QROPS (“transfer A”) is excluded from the overseas transfer charge under section 244AC if during so much of the relevant period as is after the time of transfer A—
(a) the member is resident in the country or territory in which the QROPS is established, and
(b) there is no subsequent onward transfer that—
(i) is of sums and assets which, in whole or part, directly or indirectly derive from those transferred by transfer A, and
(ii) is not excluded from the charge.
(4) If the member is resident in that country or territory at the time of transfer A, it is to be assumed for the purposes of subsection (3) that the member will be resident in that country or territory during so much of the relevant period as is after the time of transfer A; but if, at a time before the end of the relevant period, the transfer ceases to be excluded by subsection (3) otherwise than by reason of the member's death—
(a) that assumption is from that time no longer to be made, and
(b) the charge on transfer A is treated as charged at that time.
244D Exclusion: receiving scheme is an occupational pension scheme
A transfer to a QROPS is excluded from the overseas transfer charge under section 244AC if—
(a) the QROPS is an occupational pension scheme, and
(b) when the transfer is made, the member is an employee of a sponsoring employer of the QROPS.
244E Exclusion: receiving scheme set up by international organisation
(1) A transfer to a QROPS is excluded from the overseas transfer charge under section 244AC if—
(a) the QROPS is established by an international organisation and has effect so as to provide benefits for, or in respect of, past service as an employee of the organisation, and
(b) when the transfer is made, the member is an employee of the organisation.
(2) In this section “international organisation” means an organisation to which section 1 of the International Organisations Act 1968 applies by virtue of an Order in Council under subsection (1) of that section.
244F Exclusion: receiving scheme is an overseas public service scheme
(1) A transfer to a QROPS is excluded from the overseas transfer charge under section 244AC if—
(a) the QROPS is an overseas public service pension scheme, and
(b) when the transfer is made, the member is an employee of an employer that participates in the scheme.
(2) A QROPS is an “overseas public service pension scheme” for the purposes of this section if—
(a) either—
(i) it is established by or under the law of the country or territory in which it is established, or
(ii) it is approved by the government of that country or territory, and
(b) it is established solely for the purpose of providing benefits to individuals for or in respect of services rendered to—
(i) that country or territory, or
(ii) any political subdivision or local authority of that country or territory.
(3) For the purposes of this section, an employer participates in a QROPS that is an overseas public service pension scheme if the scheme has effect so as to provide benefits to or in respect of any or all of the employees of the employer in respect of their employment by the employer.
244G Exclusions: avoidance of double charge, and transitional protections
(1) A recognised transfer to a QROPS is excluded from the overseas transfer charge if it is made in execution of a request made before 9 March 2017.
(2) An onward transfer (“the current onward transfer”) is excluded from the overseas transfer charge under section 244AC if—
(a) the charge has been paid on the original transfer and the amount paid is not repayable, or
(b) the charge has been paid on an onward transfer (“the earlier onward transfer”) in respect of which the conditions in subsection (4) are met and the amount paid is not repayable, or
(c) the original transfer was made before 9 March 2017, or
(d) the original transfer was made on or after 9 March 2017 in execution of a request made before 9 March 2017.
(3) An onward transfer is excluded from the overseas transfer charge under section 244AC so far as the transfer is made otherwise than out of the member's ring-fenced transfer funds under the scheme from which the onward transfer is made.
(4) The conditions mentioned in subsection (2)(b) are—
(a) that the earlier onward transfer was made before the current onward transfer,
(b) that the earlier onward transfer was made after the original transfer, and
(c) that all the sums and assets transferred by the current onward transfer directly or indirectly derive from those transferred by the earlier onward transfer.
(5) An onward transfer is excluded from the overseas transfer charge under section 244AC where—
(a) the overseas transfer charge under section 244IA(1) arose in relation to the original transfer, and
(b) none of the member’s overseas transfer allowance was available on the making of the original transfer.
The Commissioners for Her Majesty's Revenue and Customs may by regulations make provision for a recognised transfer to a QROPS, a relieved relevant non-UK scheme transfer or an onward transfer to be excluded from the overseas transfer charge under section 244AC if the transfer is of a description specified in the regulations.
244I Circumstances in which exclusions do not apply
(1) Subsection (2) applies if a recognised transfer to a QROPS, a relieved relevant non-UK scheme transfer or an onward transfer would (but for this section) be excluded from the overseas transfer charge under section 244AC by any of sections 244B to 244F.
(2) The transfer is not excluded from the charge if the member has, in connection with the transfer, failed to comply with the relevant information regulation.
(3) In subsection (2) “the relevant information regulation” means whichever of the following is applicable—
(a) regulation 11BA of the Registered Pension Schemes (Provision of Information) Regulations 2006 (S.I. 2006/567), or any regulation having effect in place of any of that regulation, as (in either case) from time to time amended, and
(b) regulation 3AE of the Pension Schemes (Information Requirements for Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pension Schemes and Corresponding Relief) Regulations 2006 (S.I. 2006/208), or any regulation having effect in place of any of that regulation, as (in either case) from time to time amended.
244IA Overseas transfer charge: transfers exceeding available allowance
(1) The overseas transfer charge arises where—
(a) a transfer to a QROPS is made that is—
(i) within section 244AC(2)(a) or (b), or
(ii) an onward transfer within section 244AC(2)(c) in relation to which the original transfer is a transfer within paragraph (b) of the definition of “original transfer” (see section 244AB(1)),
(b) the transfer is excluded from the charge under section 244AC by or under any of sections 244B to 244H, and
(c) the transferred value (determined in accordance with section 244K) exceeds the amount of the member’s overseas transfer allowance that is available on the making of the transfer.
(2) The overseas transfer charge also arises where—
(a) a transfer of the kind mentioned in subsection (1)(a) is made to a QROPS,
(b) a charge under section 244AC (“the original charge”) arises in relation to the transfer,
(c) a person liable to the original charge becomes entitled under section 244M to a repayment in respect of the original charge, and
(d) the transferred value (determined in accordance with section 244K) exceeds the amount of the member’s overseas transfer allowance that is available on the making of the transfer.
244IC Availability of member’s overseas transfer allowance
(1) This section is about the availability of a member’s overseas transfer allowance on the making of a transfer of the kind mentioned in section 244IA(1)(a) (“the current overseas transfer”).
(2) If no transfer of the kind mentioned in section 244IA(1)(a) has been made in relation to the member before the current overseas transfer, the whole of the member’s overseas transfer allowance is available.
(3) Otherwise, the amount of the member’s overseas transfer allowance that is available is—
(a) so much of that allowance as is left after deducting the previously-used amount, or
(b) if none is left after deducting that amount, nil.
(4) For this purpose “the previously-used amount” is the aggregate of the transferred value (determined in accordance with section 244K) of each transfer (if any) of the kind mentioned in section 244IA(1)(a) that has been made in relation to the member before the current overseas transfer.
(5) A reference in this section to a transfer of the kind mentioned in section 244IA(1)(a) is to a transfer made on or after 6 April 2024.
244ID Information to be provided by relieved relevant non-UK scheme on block transfer
(1) Subsection (2) applies where—
(a) a relieved relevant non-UK scheme (“the transferring scheme”) makes a transfer to a QROPS, and
(b) the transfer is a block transfer in relation to any member of the transferring scheme.
(2) The scheme manager of the transferring scheme must, before the end of the period of 91 days beginning with the day of the transfer, provide the scheme manager of the QROPS with a statement stating—
(a) that the transfer is a block transfer and, accordingly, that an onward transfer subsequently made by the QROPS of sums or assets derived from those transferred by the block transfer may give rise to an overseas transfer charge under section 244IA,
(b) the date of the transfer, and
(c) the transferred value of the transfer (determined in accordance with section 244K).
(3) Section 244AB(2)(a) (meaning of “block transfer”) applies for the purposes of this section.
(1) In the case of a recognised transfer to a QROPS, the persons liable to the overseas transfer charge are—
(a) the scheme administrator of the registered pension scheme from which the transfer is made, and
(b) the member,
and their liability is joint and several.
(1A) In the case of a relieved relevant non-UK scheme transfer, the member is liable to the overseas transfer charge.
(2) In the case of an onward transfer, the persons liable to the overseas transfer charge are—
(a) the scheme manager of the QROPS, or former QROPS, from which the transfer is made, and
(b) the member,
and their liability is joint and several.
(3) Subsections (1) and (2) are subject to subsection (4), and subsections (2) and (4) are subject to subsection (5).
(4) If a recognised transfer to a QROPS or an onward transfer is one required by section 244B ... to be initially assumed to be excluded by that section but an event occurring before the end of the relevant period means that the recognised transfer to a QROPS or an onward transfer is not so excluded, the persons liable to the overseas transfer charge in the case of the recognised transfer to a QROPS or an onward transfer are—
(a) the scheme manager of any QROPS, or former QROPS, under which the member has, at the time of the event, ring-fenced transfer funds in which any of the sums and assets referred to in section 244K(6) in the case of the transfer are represented, and
(b) the member,
and their liability is joint and several.
(5) The scheme manager of a former QROPS is liable to the overseas transfer charge in the case of a transfer (“the transfer concerned”) only if the former QROPS—
(a) was a QROPS when a relevant inward transfer was made, and
(b) where a relevant inward transfer was made before 9 March 2017, was a QROPS at the start of 9 March 2017;
and here “relevant inward transfer” means a recognised or onwards transfer to the former QROPS (at a time when it was a QROPS) of sums and assets which, to any extent, are represented by sums or assets transferred by the transfer concerned.
(6) A person is liable to the overseas transfer charge whether or not—
(a) that person, and
(b) any other person who is liable to the charge,
are resident ... in the United Kingdom.
(1) Where the overseas transfer charge arises under section 244AC in relation to a transfer, the charge is—
(a) in a case where the transfer is an onward transfer and the overseas transfer charge under section 244IA(1) arose in relation to the original transfer, 25% of so much of the transferred value of the original transfer as did not exceed the amount of the member’s overseas transfer allowance that was available on the making of the original transfer;
(b) in any other case, 25% of the transferred value.
(2) Where the overseas transfer charge arises under section 244IA in relation to a transfer, the charge is 25% of so much of the transferred value as exceeds the amount of the member’s overseas transfer allowance that is available on the making of the transfer.
(1A) The transferred value, in relation to a transfer within section 244AC(2), is to be determined in accordance with this section.
(2) If the transfer is from a registered pension scheme established in the United Kingdom, the transferred value is the total of—
(a) the amount of any sums transferred, and
(b) the value of any assets transferred,
but this is subject to subsections (6) to (9).
(3) If the transfer is from a registered pension scheme established in a country or territory outside the United Kingdom, the transferred value is the total of—
(a) the amount of any sums transferred that are attributable to UK-relieved funds of the scheme, and
(b) the value of any assets transferred that are attributable to UK-relieved funds of the scheme,
but this is subject to subsections (6) to (9).
(3A) If the transfer is a transfer from a relieved relevant non-UK scheme, the transferred value is the total of—
(a) the amount of any sums transferred that are attributable to the member’s UK tax-relieved fund (see paragraph 3 of Schedule 34), and
(b) the value of any assets transferred that are attributable to that fund,
but this is subject to subsections (6) to (9).
(4) If the transfer is from a QROPS or former QROPS, the transferred value is the total of—
(a) the amount of any sums transferred that are attributable to the member's ring-fenced transfer funds under the scheme, and
(b) the value of any assets transferred that are attributable to the member's ring-fenced transfer funds under the scheme,
but this is subject to subsections (6) to (9).
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) If the transfer is one initially assumed to be excluded by section 244B ... but an event occurring before the end of the relevant period means that the transfer is not so excluded, the sums and assets mentioned in whichever of subsections (2) to (4) is applicable include only those that at the time of the event are represented in any of the member's ring-fenced transfer funds under any QROPS or former QROPS.
(7) If the operator pays a charge under section 244AC or 244IA on the transfer and does so—
(a) otherwise than by deduction from the transfer, and
(b) out of sums and assets held for the purposes of, or representing accrued rights under, the scheme from which the transfer is made,
the transferred value is the amount specified in subsection (7A).
(7A) The amount mentioned in subsection (7) is the aggregate of—
(a) the chargeable portion,
(b) the gross-up amount, and
(c) the non-chargeable portion (if any).
(7B) In subsection (7A)—
“the chargeable portion” is—
in a case where the amount of the overseas transfer charge in relation to the transfer is to be determined under paragraph (a) of section 244JA(1), an amount equal to so much of the transferred value of the original transfer mentioned in that paragraph as did not exceed the amount of the member’s overseas transfer allowance that was available on the making of the original transfer;
in a case where the amount of the overseas transfer charge in relation to the transfer is to be determined under paragraph (b) of section 244JA(1), the amount given by subsections (2) to (6);
in a case where the amount of the overseas transfer charge in relation to the transfer is to be determined under section 244JA(2), so much of the amount given by subsections (2) to (6) as exceeds the amount of the member’s overseas transfer allowance that is available on the making of the transfer;
“the gross-up amount” is an amount equal to one third of the chargeable portion;
“the non-chargeable portion” is—
the amount given by subsections (2) to (6), less
the chargeable portion.
(8) If the operator pays a charge under section 244AC or 244IA on the transfer and does so by deduction from the transfer, the transferred value is the amount given by subsections (2) to (6) before the deduction.
(9) If the member pays a charge under section 244AC or 244IA on the transfer, the transferred value is the amount given by subsections (2) to (6) without any deduction for the charge.
(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11) In this section—
“the operator” means—
the scheme administrator of the scheme from which the transfer is to be made if that scheme is a registered pension scheme, or
the scheme manager of the scheme from which the transfer is to be made if that scheme is a QROPS or former QROPS;
“UK-relieved funds”, in relation to a registered pension scheme established in a country or territory outside the United Kingdom, has the meaning given by section 242B.
244L Accounting for overseas transfer charge by scheme managers
(1) In this section “charge” means overseas transfer charge for which the scheme manager of a QROPS or former QROPS is liable.
(2) The Commissioners for Her Majesty's Revenue and Customs may by regulations make provision for or in connection with—
(a) the payment of charge, including due dates for payment,
(b) the charging of interest on charge not paid on or before its due date,
(c) notification by the scheme manager of errors in information provided by the scheme manager to the Commissioners in connection with charge or the scheme manager's liability for overseas transfer charge,
(d) repayments to scheme managers under section 244M of amounts paid by way of charge, and
(e) the making of assessments, repayments or adjustments in cases where the correct amount of charge has not been paid by the due date for payment of the charge.
(3) The regulations may, in particular—
(a) modify the operation of any provision of the Tax Acts, or
(b) provide for the application of any provision of the Tax Acts (with or without modification).
244M Repayments of charge on subsequent excluding events
(1) This section applies if—
(a) the overseas transfer charge under section 244AC arose on a transfer at the time the transfer was made, and
(b) at a time during the relevant period for the transfer, circumstances arise such that, had those circumstances existed at the time the transfer was made, the transfer would at the time it was made have been excluded from the charge by sections 244B to 244F or under section 244H.
(2) Any amount paid in respect of charge on the transfer is to be repaid by the Commissioners for Her Majesty's Revenue and Customs so far as not already repaid.
(3) Subsection (2) does not give rise to entitlement to repayment of, or cancellation of liabilities to, interest or penalties in respect of late payment of charge on the transfer.
(4) Repayment under this section to the scheme administrator of a registered pension scheme, or the scheme manager of a QROPS or former QROPS, is conditional on prior compliance with any requirements to give information to the Commissioners, about the circumstances in which the right to the repayment arises, that are imposed on the prospective recipient under section 169 or 251 (but repayment is not conditional on compliance with any time limits so imposed for compliance with any such requirements).
(5) Repayment under this section is not a relievable pension contribution.
(6) Repayment under this section to the member is conditional on making a claim, and such a claim must be made no later than one year after the end of the relevant period for the transfer concerned.
(7) The Commissioners for Her Majesty's Revenue and Customs may by regulations make provision for or in connection with claims or repayments under this section, including provision—
(a) requiring claims,
(b) about who may claim,
(c) imposing conditions for making claims, including conditions about time limits,
(d) as to additional circumstances in which repayments may be made,
(e) modifying the operation of any provision of the Tax Acts, or
(f) applying any provision of the Tax Acts (with or without modifications).
244N Discharge of liability of scheme administrator or manager
(1) In this section “operator” means—
(a) the scheme administrator of a registered pension scheme, or
(b) the scheme manager of a QROPS or former QROPS.
(2) If an operator is liable under section 244J, the operator may apply to an officer of Revenue and Customs for the discharge of the operator's liability on the following ground.
(3) The ground is that—
(a) the operator reasonably believed that there was no liability to the overseas transfer charge on the transfer concerned, and
(b) in all the circumstances of the case, it would not be just and reasonable for the operator to be liable to the charge on the transfer.
(4) On receiving an application under subsection (2), an officer of Revenue and Customs must decide whether to discharge the operator's liability.
(5) An officer of Revenue and Customs must notify the operator of the decision on the application.
(6) The discharge of the operator's liability does not affect the liability of any other person to overseas transfer charge on the transfer concerned.
(7) The Commissioners for Her Majesty's Revenue and Customs may by regulations make provision supplementing this section, including provision for time limits for making an application under this section.
245 Restriction of deduction for contributions by employer
(1) Schedule 24 to the Finance Act 2003 (c. 14) (restriction of deductions for employee benefit contributions) is amended as follows.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) In sub-paragraph (1) of paragraph 2 (“qualifying benefits”), insert at the end
or
(c) is made under an employer-financed retirement benefits scheme.
(4) In sub-paragraph (5) of that paragraph (when qualifying benefit treated as provided), after “payment of money” insert “otherwise than under an employer-financed retirement benefits scheme”.
(5) In paragraph 8 (deductions to which Schedule does not apply), for paragraphs (b) and (c) substitute—
(b) in respect of contributions under a registered pension scheme or a section 615(3) scheme,
(c) in respect of contributions under a qualifying overseas pension scheme in respect of an individual who is a relevant migrant member of the pension scheme in relation to the contributions,
.
(6) In sub-paragraph (1) of paragraph 9 (interpretation), in the definition of “employee benefit scheme”, after “include,” insert “present or former”.
(7) In that sub-paragraph, after the definition of “the employer” insert—
“employer-financed retirement benefits scheme” has the same meaning as in Chapter 2 of Part 6 of the Income Tax (Earnings and Pensions) Act 2003 (see section 393A of that Act);
.
(8) In that sub-paragraph, after the definition of “qualifying expenses” insert—
“qualifying overseas pension scheme” has the same meaning as in Schedule 33 to the Finance Act 2004 (see paragraphs 5 and 6 of that Schedule);
“registered pension scheme” has the same meaning as in Part 4 of that Act (see section 150 of that Act);
“relevant migrant member” has the same meaning as in Schedule 33 to that Act (see paragraph 4 of that Schedule);
“section 615(3) scheme” means a superannuation fund to which section 615(3) of the Taxes Act 1988 applies;
.
246 Restriction of deduction for non-contributory provision
(1) This section applies in relation to an employer’s expenses of providing benefits to or in respect of present or former employees under an employer-financed retirement benefits scheme in a case where—
(a) the expenses do not consist of the making of contributions under the scheme, but
(b) in accordance with generally accepted accounting practice they are shown in the employer’s accounts.
(2) Unless the benefits are ones in respect of which a person is, on receipt, chargeable to income tax, the expenses—
(a) are not deductible in computing the amount of the profits of the employer for the purposes of Part 2 of ITTOIA 2005 or Part 3 of CTA 2009 (trading income),
(b) are not expenses of management of the employer for the purposes of Chapter 2 of Part 16 of CTA 2009 (expenses of management: companies with investment business), and
(c) are not to count as ordinary BLAGAB management expenses of the employer for an accounting period for the purposes of section 76 of FA 2012.
(3) But where the benefits are ones in respect of which a person is, on receipt, chargeable to income tax—
(a) if the expenses are allowed to be deducted in computing the amount of the profits of the employer to be charged under Part 2 of ITTOIA 2005 or Part 3 of CTA 2009 (trading income), they are deductible in computing the amount of the profits for the period of account in which they are paid, and
(b) for the purposes of the operation in relation to the employer of section 76 of FA 2012 or Chapter 2 of Part 16 of CTA 2009, the expenses are referable to the accounting period in which they are paid.
(4) In this section “employer-financed retirement benefits scheme” has the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see section 393A of that Act).
246A Case where no relief for provision by an employer
(1) An employer's expenses of providing relevant benefits to or in respect of a present or former employee (“the employee”) under an employer-financed retirement benefits scheme (whether or not by the making of contributions under the scheme) are not subject to relief if subsection (2) applies.
(2) This subsection applies where—
(a) the provision of the relevant benefits results in a reduction in the benefits payable to or in respect of the employee under a registered pension scheme, or
(b) a reduction in the benefits payable to or in respect of the employee under a registered pension scheme results in the provision of the relevant benefits.
(3) But if the extent to which contributions paid by the employer under the registered pension scheme in respect of the employee are subject to relief has been restricted in accordance with regulations under section 196A, the employer's expenses of providing the relevant benefits are not prevented from being subject to relief to the extent that is just and reasonable.
(4) The references in this section to expenses of an employer being subject to relief are to—
(a) their being deductible in computing the amount of the profits of the employer for the purposes of Part 2 of ITTOIA 2005 or Part 3 of CTA 2009 (trading income),
(b) their being expenses of management of the employer for the purposes of Chapter 2 of Part 16 of CTA 2009 (expenses of management: companies with investment business), or
(c) their being ordinary BLAGAB management expenses of the employer for an accounting period for the purposes of section 76 of FA 2012 ,
(depending on which is appropriate in relation to the employer).
(5) In this section—
“employer-financed retirement benefits scheme”, and
“relevant benefits”,
have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections 393A and 393B of that Act).
247 Abolition of income tax charge in respect of employer payments
In Part 6 of ITEPA 2003, omit Chapter 1 (payments by employer for the provision of benefits for an employee under certain schemes to count as employment income of employee).
248 Employer’s cost of insuring against non-payment of benefit
(1) Section 307 of ITEPA 2003 (no liability to income tax in respect of chargeable benefit on provision made by employer for a retirement or death benefit) is amended as follows.
(2) After subsection (1) insert—
(1A) Subsection (1) does not apply to provision made for insuring against the risk that a retirement or death benefit under an employer-financed retirement benefits scheme cannot be paid or given because of the employer’s insolvency.
(1B) In subsection (1A) “employer-financed retirement benefits scheme” has the same meaning as in Chapter 2 of Part 6 (see section 393A).
(3) In subsection (2), for “subsection (1)” substitute “this section”.
(1) Chapter 2 of Part 6 of ITEPA 2003 (taxation of non-pension benefits from certain pension schemes) is amended as follows.
(2) In the heading of the Chapter, for “non-approved pension” substitute “employer-financed retirement benefits”.
(3) For section 393 substitute—
Application of this Chapter
393 (1) This Chapter applies to relevant benefits provided under an employer-financed retirement benefits scheme.
(2) Section 393A defines “employer-financed retirement benefits scheme” and section 393B defines “relevant benefits”.
Employer-financed retirement benefits scheme
393A (1) In this Chapter “employer-financed retirement benefits scheme” means a scheme for the provision of benefits consisting of or including relevant benefits to or in respect of employees or former employees of an employer.
(2) But neither—
(a) a registered pension scheme, nor
(b) a section 615(3) scheme,
is an employer-financed retirement benefits scheme.
(3) “Section 615(3) scheme” means a superannuation fund to which section 615(3) of ICTA applies.
(4) “Scheme” includes a deed, agreement, series of agreements, or other arrangements.
Relevant benefits
393B (1) In this Chapter “relevant benefits” means any lump sum, gratuity or other benefit (including a non-cash benefit) provided (or to be provided)—
(a) on or in anticipation of the retirement of an employee or former employee,
(b) on the death of an employee or former employee,
(c) after the retirement or death of an employee or former employee in connection with past service,
(d) on or in anticipation of, or in connection with, any change in the nature of service of an employee, or
(e) to any person by virtue of a pension sharing order or provision relating to an employee or former employee.
(2) But—
(a) benefits charged to tax under Part 9 (pension income),
(b) benefits chargeable to tax by virtue of Schedule 34 to FA 2004 (which applies certain charges under Part 4 of that Act in relation to non-UK schemes), and
(c) excluded benefits,
are not relevant benefits.
(3) The following are “excluded benefits”—
(a) benefits in respect of ill-health or disablement of an employee during service,
(b) benefits in respect of the death by accident of an employee during service,
(c) benefits under a relevant life policy, and
(d) benefits of any description prescribed by regulations made by the Board of Inland Revenue.
(4) In subsection (3)(c) “relevant life policy” means—
(a) an excepted group life policy as defined in section 480 of ITTOIA 2005,
(b) a policy of life insurance the terms of which provide for the payment of benefits on the death of a single individual and with respect to which—
(i) condition A in section 481 of that Act would be met if paragraph (a) in that condition referred to the death, in any circumstances or except in specified circumstances, of that individual (rather than the death in any circumstances of each of the individuals insured under the policy) and if the condition did not include paragraph (b), and
(ii) conditions C and D in that section and conditions A and C in section 482 of that Act are met, or
(c) a policy of life insurance that would be within paragraph (a) or (b) but for the fact that it provides for a benefit which is an excluded benefit under or by virtue of paragraph (a), (b) or (d) of subsection (3).
(5) In subsection (1)(e) “pension sharing order or provision” means any such order or provision as is mentioned in section 28(1) of WRPA 1999 or Article 25(1) of WRP(NI)O 1999.
(4) Section 394 (charge on benefit) is amended as follows.
(5) After subsection (1) insert—
(1A) Subsection (1) does not apply in relation to the benefit if the total amount of the benefits to which this Chapter applies received by the individual in the relevant tax year does not exceed £100.
(6) In subsection (2), for “administrator of” substitute “person who is (or persons who are) the responsible person in relation to”.
(7) In subsection (3), for “subsections (1) and (2)” substitute “this section”.
(8) For sections 395 to 397 substitute—
Reduction where employee has contributed
395 (1) This section applies in relation to a relevant benefit under an employer-financed retirement benefits scheme in the form of a lump sum where, under the scheme, an employee has paid any sum or sums by way of contribution to the provision of the lump sum.
(2) The amount which, by virtue of section 394, counts as employment income, or is chargeable to tax under subsection (2) of that section, is the amount of the lump sum reduced by the sum, or the aggregate of the sums, paid by the employee by way of contribution to the provision of the lump sum.
(3) A reduction under this section may not be claimed in respect of the same contribution in relation to more than one lump sum.
(4) It is to be assumed, unless the contrary is shown, that no reduction is applicable under this section.
(9) In subsection (1) of section 399 (valuation of benefit in form of loan), for “administrator of” substitute “person who is (or any of the persons who are) the responsible person in relation to”.
(10) In subsection (2) of that section, for “administrator” substitute “responsible person”.
(11) For section 400 substitute—
Responsible person
399A (1) The following heads specify the person who is, or persons who are, the responsible person in relation to an employer-financed retirement benefits scheme for the purposes of this Chapter.
(2) But if a person is, or persons are, the responsible person in relation to the scheme by virtue of being specified under one head, no-one is the responsible person in relation to the scheme by virtue of being specified under a later head.
Head 1
If there are one or more trustees of the scheme who are resident in the United Kingdom, that trustee or each of those trustees.
Head 2
If there are one or more persons who control the management of the scheme, that person or each of those persons.
Head 3
If alive or still in existence, the employer, or any of the employers, who established the scheme and any person by whom that employer, or any of those employers, has been directly or indirectly succeeded in relation to the provision of benefits under the scheme.
Head 4
Any employer of employees to or in respect of whom benefits are, or are to be, provided under the scheme.
Head 5
If there are one or more trustees of the scheme who are not resident in the United Kingdom, that trustee or each of those trustees.
Interpretation
400 In this Chapter—
“employer-financed retirement benefits scheme” has the meaning given by section 393A;
“relevant benefits” has the meaning given by section 393B; and
“responsible person” has the meaning given by section 399A.
(12) In Part 2 of Schedule 1 to ITEPA 2003 (defined expressions), insert at the appropriate places—
employer-financed retirement benefits scheme (in Chapter 2 of Part 6) | section 393A
relevant benefits (in Chapter 2 of Part 6) | section 393B
responsible person (in Chapter 2 of Part 6) | section 399A
.
(1) The Inland Revenue may, in relation to any tax year, by notice require the scheme administrator of a registered pension scheme—
(a) to make and deliver to the Inland Revenue a return containing any information reasonably required by the notice, and
(b) to deliver with the return any accounts, statements or other documents relating to information contained in the return which may reasonably be required by the notice.
(2) The information that may be required to be included in the return is any information relating to—
(a) contributions made under the pension scheme,
(b) transfers of sums or assets held for the purposes of, or representing accrued rights under, another pension scheme so as to become held for the purposes of, or to represent rights under, the pension scheme,
(c) income and gains derived from investments or deposits held for the purposes of the pension scheme,
(d) other receipts of the pension scheme,
(e) the sums and other assets held for the purposes of the pension scheme,
(f) the liabilities of the pension scheme,
(g) the provision of benefits by the pension scheme,
(h) transfers of sums or assets held for the purposes of, or representing accrued rights under, the pension scheme so as to become held for the purposes of, or to represent rights under, another pension scheme,
(i) other expenditure of the pension scheme,
(j) the membership of the pension scheme, or
(k) any other matter relating to the administration of the pension scheme.
(3) The information that may be required to be included in the return may be limited to information concerning any particular arrangement or arrangements under the pension scheme.
(4) The notice must specify the period to be covered by the return.
(5) The period may be—
(a) the whole or any specified part of the tax year, or
(b) if audited accounts of the pension scheme have been prepared for any period or periods ending in the tax year, the period or periods covered by the accounts.
(6) “Audited accounts” means accounts audited by a person of a description specified in regulations made by the Board of Inland Revenue.
(7) A return relating to the whole or part of, or to a period or periods ending in, a tax year must be delivered—
(a) where the notice requiring the return is given after the 31st October in the next tax year, before the end of the period of three months beginning with the day on which the notice is given, and
(b) otherwise, not later than the 31st January in the next tax year (but subject as follows).
(8) If, in a case within paragraph (b) of subsection (7), the winding-up of the pension scheme has been completed before 31st October in the next tax year, the return must be delivered before the end of the period of three months beginning with the day on which the winding-up is completed.
(9) But subsection (8) does not apply if the end of that period is before the end of the period of three months beginning with the day on which the notice is given; and in that case the return must be delivered before the end of that period.
(1) The Board of Inland Revenue may by regulations make provision requiring persons of a prescribed description—
(a) to provide to the Inland Revenue, in a form specified by the Board of Inland Revenue, information of a prescribed description relating to any of the matters mentioned in subsection (2), and
(b) to preserve for a prescribed period any documents relating to such information.
(2) Those matters are—
(a) any matter relating to a registered pension scheme,
(b) any matter relating to a pension scheme which has ceased to be a registered pension scheme,
(c) any matter relating to a pension scheme in relation to which an application for registration has been made,
(d) any matter relating to an annuity purchased with sums or assets held for the purposes of a registered pension scheme,
(e) the coming into operation of an employer-financed retirement benefits scheme, and
(f) the provision of relevant benefits under an employer-financed retirement benefits scheme.
(3) In subsection (2)—
“employer-financed retirement benefits scheme”, and
“relevant benefits”,
have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections 393A and 393B of that Act).
(4) The Board of Inland Revenue may by regulations make provision—
(a) requiring scheme administrators of registered pension schemes or other persons of a prescribed description to provide information of a prescribed description to persons of such of the descriptions mentioned in subsection (5) as are prescribed or to the scheme administrators of other registered pension schemes, ...
(b) requiring persons of such of the descriptions specified in subsection (5) as are prescribed to provide information of a prescribed description to the scheme administrators of registered pension schemes,
(ba) requiring, in a case where a payment (“the onwards payment”) is made directly or indirectly out of a sum on whose payment tax has been charged under section 206, the person making the onwards payment to provide information of a prescribed description to the person to whom the onwards payment is made,
(c) requiring scheme administrators of registered pension schemes to provide information of a prescribed description to scheme managers of qualifying recognised overseas pension schemes, or
(d) requiring members or former members of a relevant non-UK pension scheme to provide information to the scheme administrators, or scheme managers, of registered pension schemes or other relevant non-UK pension schemes.
(5) Those persons are—
(a) members of a registered pension scheme,
(aa) employers of members of a registered pension scheme,
(b) persons who have ceased to be members of a registered pension scheme,
(c) persons to whom benefits under a registered pension scheme are being, or have been, provided,
(d) the personal representatives of any person within paragraphs (a) to (c), and
(e) insurance companies who pay annuities purchased with sums or assets held for the purposes of registered pension schemes.
(5A) Regulations under this section may make different provision for different cases.
(6) “Prescribed”, in relation to regulations, means prescribed by the regulations; and “relevant non-UK scheme” has the meaning given by paragraph 1 of Schedule 34.