(1) A scheme administrator of a registered pension scheme must make returns to the Inland Revenue of the income tax to which the scheme administrator is liable under this Part.
(2) A return is to be made for each period of three months ending with 31st March, 30th June, 30th September or 31st December if tax has been charged on the scheme administrator by virtue of this Part in that period.
(3) A return for any period must be made before the end of the period of 45 days beginning with the day immediately following the end of that period.
(4) A return must—
(a) show the income tax to which the scheme administrator is liable, and
(b) include such particulars of the events or other circumstances giving rise to the liability (including particulars as to the persons to whom the events or other circumstances relate) as are required to be included in returns under this section by regulations made by the Board of Inland Revenue.
(5) The income tax required to be shown in a return is due at the time by which the return is to be made and is payable without the making of an assessment.
(6) The Board of Inland Revenue may by regulations make provision for and in connection with—
(a) the charging of interest on tax due under this section which is not paid on or before the due date,
(b) the making of amended returns by scheme administrators in the event of error in a return under this section,
(ba) repayments under section 244M to scheme administrators,
(c) the making of assessments, repayments or adjustments in cases where the correct tax due under this section has not been paid on or before the due date, and
(d) otherwise for supplementing this section.
(7) 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 modifications).
(7A) Where a scheme administrator is liable under section 237B in respect of the annual allowance charge for a tax year, for the purposes of subsection (2) the tax is to be taken to be charged on the scheme administrator in the later of—
(a) the period ending with 31 December in the year following that in which that tax year ended, and
(b) the period following the period in which the scheme administrator receives the notice which gives rise to the liability,
subject to subsections (7AA) and (7B).
(7AA) The tax described in subsection (7A) is to be taken for the purposes of subsection (2) to be charged in an earlier period if the scheme administrator makes an election to that effect in the return for the earlier period.
(7B) ...If the notice which gave rise to the liability is amended in accordance with regulations under section 237B(5)(c), any additional tax to which the scheme administrator becomes liable is to be taken for the purposes of subsection (2) to be charged in the later of the period in which it is taken to be charged by virtue of subsection (7A) or (7AA) and the period in which the scheme administrator receives notice of the amendment.
(8) References in this section to the income tax to which a scheme administrator is liable under this Part do not include any to which the scheme administrator is liable under section 239 (scheme sanction charge).
(9) Where the registration of a registered pension scheme has been withdrawn, this section has effect as if references to the scheme administrator were to the person who was, or each of the persons who were, the scheme administrator immediately before the registration was withdrawn.
(1) The Board of Inland Revenue may by regulations make provision for and in connection with the making of assessments in respect of—
(a) the unauthorised payments charge,
(b) the unauthorised payments surcharge,
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(ca) liability to the annual allowance charge by virtue of section 237B,
(d) the scheme sanction charge,
(da) liability of the scheme administrator of a registered pension scheme, or the scheme manager of a qualifying recognised overseas pension scheme or of a former such scheme, to the overseas transfer charge,
(e) liability under section 272 (trustees etc. liable as scheme administrator),
(ea) liability under section 272C (former scheme administrator to retain liability in cases involving independent trustees etc),
(f) liability under section 273 (member liable as scheme administrator), ...
(g) liability under section 394 of ITEPA 2003 (benefit under employer-financed retirement benefits scheme: charge on responsible person), and
(h) the charge to tax under Part 9 of ITEPA 2003 (pension income) on pension income to which section 579A of that Act (pension income under registered pension schemes) applies by virtue of any of the following provisions—
(i) section 637H(2) (certain defined benefits lump sum death benefits);
(ii) section 637H(2) (certain defined benefits lump sum death benefits);
(iii) section 637I(2) (certain pension protection lump sum death benefits);
(iv) section 637J(2) (certain uncrystallised funds lump sum death benefits);
(v) section 637K(2) (certain annuity protection lump sum death benefits);
(vi) section 637L(2) (certain drawdown pension fund lump sum death benefits);
(vii) section 637M(2) (flexi-access drawdown lump sum death benefits).
(2) The provision that may be made by the regulations includes (in particular) provision for the charging of interest on tax due under such assessments which remains unpaid.
(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).
(1) The Board of Inland Revenue may give directions requiring specified persons to use electronic means for the making of specified payments required to be made under or by virtue of this Part.
(2) Directions under this section may make provision—
(a) as to conditions that must be complied with in connection with the use of electronic means for the making of any payment,
(b) for treating a payment as not having been made unless conditions imposed by the directions are satisfied, and
(c) for determining the time when a payment in accordance with directions under this section is to be taken to be made.
(3) Directions under this section may also make provision (which may include provision for the application of conclusive or other presumptions) as to the manner of proving for any purpose—
(a) whether any use of electronic means for making a payment is to be taken as having resulted in the payment being made,
(b) the time of the making of any payment for the making of which electronic means have been used, and
(c) any other matter for which provision may be made by directions under this section.
(4) Directions under this section—
(a) may be specific or general, and
(b) may provide that the conditions of any authorisation or requirement imposed by the directions are to be taken to be satisfied only where the Inland Revenue is satisfied as to specified matters.
(5) Directions under this section may—
(a) suspend for any period during which the use of electronic means for the making of payments is impossible or impractical, any requirements imposed by the directions relating to the use of such means,
(b) substitute alternative requirements for the suspended ones, and
(c) make any provision that is necessary in consequence of the imposition of the substituted requirements.
(6) Directions under this section may—
(a) make different provision for different cases,
(b) make such incidental, supplementary, consequential and transitional provision in connection with any provision contained in such directions as the Board of Inland Revenue thinks fit.
(7) In this section—
“the Inland Revenue” includes any person who for the purposes of the electronic means of payment is acting under the authority of the Board of Inland Revenue, and
“specified” means specified in a direction under this section.
(1) A payment made to the Board of Inland Revenue or the Inland Revenue under or by virtue of this Part (otherwise than in cash) is to be treated as not having been made until the earliest date on or before which all the transactions that need to be completed before the whole amount of the payment becomes available to the Board are capable of being completed.
(2) In this section “the Inland Revenue” includes any person who is acting under the authority of the Board of Inland Revenue.
(1) This section applies to regulations made by the Board of Inland Revenue under—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d) paragraph 7(1)(b) or 11A(1)(c) of Schedule 36 (enhancement of allowances: primary protection),
(e) paragraph 12(1) or 15A(1)(b) of that Schedule (...: enhanced protection), ...
(f) paragraph 18(1)(b) of that Schedule (enhancement of allowances: pre-commencement pension credits),
(g) paragraph 20A(1)(d) of that Schedule (enhancement factor: pension credits from previously crystallised rights),
(h) paragraph 20B(1)(b) of that Schedule (enhancement factor: non-residence), and
(i) paragraph 20E(1)(b) of that Schedule (enhancement factor: transfers from recognised overseas pension scheme).
(2) The regulations to which this section applies are referred to in this Part as “enhanced ... allowance regulations”.
(3) Enhanced ... allowance regulations may include any provision that appears appropriate for securing that the correct tax is charged—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) in respect of the payment of lump sums by registered pension schemes.
(4) Enhanced ... allowance regulations may, for that purpose, in particular contain provision—
(a) requiring any person to produce or make available documents, produce certificates or provide information, and
(b) for the review from time to time of any matter registered in accordance with the regulations.
(1) If the scheme administrator of a registered pension scheme fails to comply with a notice under section 250 (registered pension scheme return), the scheme administrator is liable to a penalty of £100.
(2) If the failure continues after a penalty is imposed under subsection (1), the scheme administrator is liable to a further penalty not exceeding £60 for each day on which the failure continues after the day on which that penalty was imposed (but excluding any day for which a penalty under this subsection has already been imposed).
(3) No penalty may be imposed under subsection (1) or (2) in respect of a failure after it has been remedied.
(4) If the scheme administrator of a registered pension scheme fraudulently or negligently—
(a) makes an inaccurate return required by a notice under section 250, or
(b) delivers any inaccurate accounts, statements or other documents with such a return,
the scheme administrator is liable to a penalty not exceeding £3,000.
(1) In section 98 of TMA 1970 (penalties for failure to provide information and providing false information), in the second column of the Table, insert at the appropriate place— “regulations under section 251(1)(a) or (4) of the Finance Act 2004;”.
(2) A person who fails to comply with regulations under section 251(1)(b) (preservation of documents) is liable to a penalty not exceeding £3,000.
261 Enhanced ... allowance regulations: documents and information
(1) This section applies where an individual fraudulently or negligently—
(a) produces or makes available an inaccurate document, or produces an inaccurate certificate, in connection with any matter registered in accordance with enhanced ... allowance regulations, or
(b) provides false information in connection with any such matter,
and the condition in subsection (2) is met.
(2) The condition is that—
(a) the amount of the individual’s lump sum allowance or lump sum and death benefit allowance at the time which is relevant for the purposes of this paragraph, or
(b) the amount of the pension commencement lump sums or the uncrystallised funds pension lump sums to which the individual may be entitled at the time which is relevant for the purposes of this paragraph,
would be greater than it actually is were the document or certificate correct or the information true.
(3) The individual is liable to a penalty not exceeding 25% of the relevant excess.
(4) In a case within paragraph (a) of subsection (2), the relevant excess is the difference between what would be the amount of the individual’s lump sum and death benefit allowance at the time which is relevant for the purposes of that paragraph (were the document or certificate correct or the information true) and the actual amount of the individual’s lump sum and death benefit allowance at that time.
(5) The time which is relevant for the purposes of paragraph (a) of subsection (2)—
(a) where a relevant benefit crystallisation event within the meaning of section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance) has occurred in relation to the individual since the document was produced or made available, the certificate produced or the information provided (but before a penalty under this section is imposed), is the time when the relevant benefit crystallisation event occurred, and
(b) otherwise, is the time when the document was produced or made available, the certificate produced or the information provided.
(6) In a case within paragraph (b) of subsection (2), the relevant excess is the difference between—
(a) what would be the amount of the pension commencement lump sums or the uncrystallised funds pension lump sums to which the individual may be entitled at the time which is relevant for the purposes of that paragraph (were the document or certificate correct or the information true), and
(b) the actual amount at that time of the pension commencement lump sums or the uncrystallised funds pension lump sums to which the individual may be entitled.
(7) The time which is relevant for the purposes of paragraph (b) of subsection (2) is the time when the document was produced or made available, the certificate produced or the information provided.
262 Enhanced ... allowance regulations: failures to comply
An individual who fails—
(a) to produce or make available any document required to be produced by enhanced ... allowance regulations,
(b) to produce any certificate required to be produced by enhanced ... allowance regulations, or
(c) to provide any information required to be provided by enhanced ... allowance regulations,
is liable to a penalty not exceeding £3,000.
(1) This section applies where—
(a) paragraph 12 of Schedule 36 (enhancement of allowances: enhanced protection) applies in relation to an individual, and
(b) relevant benefit accrual occurs in relation to the individual (as to which see paragraph 13 of that Schedule).
(2) If the individual fails to notify the Inland Revenue of the relevant benefit accrual within the period of 90 days beginning with the day on which it occurs, the individual is liable to a penalty not exceeding £3,000.
(1) A person who fraudulently or negligently makes a false statement or representation is liable to a penalty not exceeding £3,000 if, in consequence of the statement or representation—
(a) that person or any other person obtains relief from, or repayment of, tax chargeable under this Part or under Part 9 of ITEPA 2003 (pension income) on pension income to which—
(i) any provision of Chapter 15A of that Part of that Act (lump sums under registered pension schemes) applies, or
(ii) section 579A of that Act (pension income under registered pension schemes) applies by virtue of any provision of that Chapter, or
(b) a registered pension scheme makes a payment which is an unauthorised payment.
(2) A person who assists in or induces the preparation of any document which the person knows—
(a) is inaccurate, and
(b) will, or is likely to, cause a registered pension scheme to make an unauthorised payment,
is liable to a penalty not exceeding £3,000.
(1) This section applies where the winding-up of a registered pension scheme has begun and the Inland Revenue considers the pension scheme is being wound up wholly or mainly for the purpose specified in subsection (2).
(2) That purpose is facilitating the payment of winding-up lump sums ... under the pension scheme.
(3) The scheme administrator is liable to a penalty not exceeding the relevant amount.
(4) The relevant amount is £3,000 in respect of—
(a) each member to whom a winding-up lump sum is paid under the pension scheme, ...
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) This section applies where sums held for the purposes of, or representing accrued rights under, a registered pension scheme (“the transferor scheme”) are transferred so as to become held for the purposes of, or to represent rights under, a registered pension scheme that is an insured scheme (“the transferee scheme”).
(2) The scheme administrator of the transferor scheme is liable to a penalty not exceeding £3,000 unless the sums are transferred either to the scheme administrator of the transferee scheme or to a relevant insurance company.
(3) In this section—
“insured scheme” means a pension scheme all the income and other assets of which are invested in policies of insurance, and
“relevant insurance company” means an insurance company that issued any of the policies of insurance.
(1) This section applies where—
(a) a liability to the unauthorised payments charge, or to both the unauthorised payments charge and the unauthorised payments surcharge, has arisen in respect of an unauthorised member payment, and
(b) property or money is transferred, or a sum paid, towards a registered pension scheme pursuant to a relevant order as a result of the unauthorised member payment.
(2) The member of the registered pension scheme to or in respect of whom the unauthorised member payment was made (or, if it was paid after his death, the recipient) may claim relief from—
(a) the relevant proportion of the unauthorised payments charge, and
(b) if a liability to the unauthorised payments surcharge has arisen and subsection (4) is satisfied, the relevant proportion of the unauthorised payments surcharge.
(3) The claim must be made within the period of one year beginning with the day on which the property or money is transferred, or the sum paid.
(4) This subsection is satisfied if no part of the unauthorised member payment and no asset or sum representing it—
(a) has been received by (or on behalf of) the member or a person connected with the member, or
(b) has been held for more than 180 days by a person or succession of persons, other than the member or a person connected with the member, involved in any transaction by which the unauthorised member payment was made.
(5) The relevant proportion of the unauthorised payments charge or the unauthorised payments surcharge is—
ASOUMP
where—
ASO is the amount subject to the relevant order, that is the aggregate of the market value of any property and the amount of any money transferred, or the amount of the sum paid, towards a registered pension scheme pursuant to the relevant order in respect of the unauthorised member payment, and
UMP is the amount of the unauthorised member payment.
(6) But if ASO is greater than UMP, the relevant proportion of the unauthorised payments charge or the unauthorised payments surcharge is the whole of it.
(6A) In this section “relevant order” means an order under any of the following—
(a) section 16(1), 19(4) or 21(2)(a) of the Pensions Act 2004 (orders for money etc to be restored to pension schemes), or
(b) Article 12(1), 15(4) or 17(2)(a) of the Pensions (Northern Ireland) Order 2005 (corresponding provision for Northern Ireland).
(7) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.
(1) This section applies where—
(a) the scheme administrator of a registered pension scheme has become liable to the scheme sanction charge in respect of an unauthorised member payment, and
(b) property or money is transferred, or a sum paid, towards a registered pension scheme pursuant to a relevant order as a result of the unauthorised member payment.
(2) The scheme administrator may, within the period of one year beginning with the day on which the property or money is transferred, or the sum paid, claim relief from the relevant proportion of the scheme sanction charge.
(3) The relevant proportion of the scheme sanction charge is—
ASOUMP
where—
ASO is the amount subject to the relevant order, that is the aggregate of the market value of any property and the amount of any money transferred, or the amount of the sum paid, towards a registered pension scheme pursuant to the relevant order in respect of the unauthorised member payment, and
UMP is the amount of the unauthorised member payment.
(4) But if ASO is greater than UMP, the relevant proportion of the scheme sanction charge is the whole of it.
(5) In this section “relevant order” means an order under any of the following—
(a) section 16(1), 19(4) or 21(2)(a) of the Pensions Act 2004 (orders for money etc to be restored to pension schemes), or
(b) Article 12(1), 15(4) or 17(2)(a) of the Pensions (Northern Ireland) Order 2005 (corresponding provision for Northern Ireland).
268 Unauthorised payments surcharge and scheme sanction charge
(1) This section applies where—
(a) a person is liable to the unauthorised payments surcharge in respect of an unauthorised payment, or
(b) the scheme administrator of a registered pension scheme is liable to the scheme sanction charge in respect of a scheme chargeable payment.
(2) The person liable to the unauthorised payments surcharge may apply to the Inland Revenue for the discharge of the person’s liability to the unauthorised payments surcharge in respect of the unauthorised payment on the ground mentioned in subsection (3).
(3) The ground is that in all the circumstances of the case, it would be not be just and reasonable for the person to be liable to the unauthorised payments surcharge in respect of the payment.
(4) On receiving an application by a person under subsection (2) the Inland Revenue must decide whether to discharge the person’s liability to the unauthorised payments surcharge in respect of the payment.
(5) The scheme administrator may apply to the Inland Revenue for the discharge of the scheme administrator’s liability to the scheme sanction charge in respect of a scheme chargeable payment on the ground mentioned in subsection (6) or (7).
(6) In the case of a scheme chargeable payment which is treated as being an unauthorised member payment by section 172, 172A, 172B, ... 172C or 172D ..., the ground is that, in all the circumstances of the case, it would not be just and reasonable for the scheme administrator to be liable to the scheme sanction charge.
(7) In any other case, the ground is that—
(a) the scheme administrator reasonably believed that the unauthorised payment was not a scheme chargeable payment, and
(b) in all the circumstances of the case, it would not be just and reasonable for the scheme administrator to be liable to the scheme sanction charge in respect of the unauthorised payment.
(7A) Subsection (7) applies with the omission of its paragraph (a) if the scheme chargeable payment is a payment of a lump sum where the conditions in paragraph 1B(2)(a) to (g) of Schedule 29 are met.
(8) On receiving an application under subsection (5), the Inland Revenue must decide whether to discharge the scheme administrator’s liability to the scheme sanction charge in respect of the unauthorised payment.
(9) The Inland Revenue must notify the applicant of the decision on an application under this section.
(10) Regulations made by the Board of Inland Revenue may make provision supplementing this section; and the regulations may in particular make provision as to the time limits for the making of an application.
269 Appeal against decision on discharge of liability
(1) This section applies where the Inland Revenue—
(a) decides to refuse an application under section 237D (discharge of scheme administrator's liability to annual allowance charge), section 244N (discharge of liability to overseas transfer charge), ... or section 268 (discharge of liability to unauthorised payments surcharge or scheme sanction charge), ...
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) The applicant may appeal against the decision.
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) An appeal under this section against a decision must be brought within the period of 30 days beginning with the day on which the applicant was given notification of the decision.
(6) On an appeal under subsection (1)(a) that is notified to the tribunal, the tribunal must consider whether the applicant’s liability to the ... unauthorised payments surcharge or scheme sanction charge ought to have been discharged.
(7) If the tribunal considers that the applicant’s liability ought not to have been discharged, the tribunal must dismiss the appeal.
(8) If the tribunal considers that the applicant’s liability ought to have been discharged, the tribunal must grant the application.
(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) References in this Part to the scheme administrator, in relation to a pension scheme, are to the person who is, or persons who are, appointed in accordance with the rules of the pension scheme to be responsible for the discharge of the functions conferred or imposed on the scheme administrator of the pension scheme by and under this Part.
(2) But a person is not the person who is, or one of the persons who are, the scheme administrator of a pension scheme at any time unless, at that time, the person—
(a) is resident in the United Kingdom ..., ...
(b) has made the required declaration to the Inland Revenue, and
(c) has made to an officer of Revenue and Customs any other declarations which are reasonably required by Her Majesty's Revenue and Customs.
(3) “The required declaration”is a declaration that the person—
(a) understands that the person will be responsible for discharging the functions conferred or imposed on the scheme administrator of the pension scheme by and under this Part, and
(b) intends to discharge those functions at all times ....
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) Any liability of a person who is, or of any of the persons who are, the scheme administrator of a registered pension scheme ceases to be a liability of that person on the person ceasing to be, or to be one of the persons who is, the scheme administrator of the pension scheme.
This subsection does not apply to a liability to pay a penalty and is subject to subsection (4).
(2) Where a person becomes, or becomes one of the persons who is, the scheme administrator of a registered pension scheme, the person assumes any existing liabilities of the scheme administrator of the pension scheme, other than any liability to pay a penalty.
(3) Subsection (4) applies where, on the person who is or the persons who are the scheme administrator of a registered pension scheme ceasing to be the scheme administrator, there is no scheme administrator of the pension scheme.
(4) Any liability of the person or persons as scheme administrator remains a liability of that person or those persons as if still the scheme administrator (unless dead or having ceased to exist) until another person becomes, or other persons become, the scheme administrator of the pension scheme.
(5) But a person who retains, or persons who retain, any liability by virtue of subsection (4) may apply to the Inland Revenue to be released from the liability.
(6) On receipt of the application the Inland Revenue must decide whether or not to release the applicant or applicants from the liability and must notify the applicant, or each of the applicants, of the decision.
(7) If the decision is not to release the applicant or applicants from the liability the applicant or applicants may appeal against the decision.
(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9) The appeal must be brought within the period of 30 days beginning with the day on which the applicant was notified of the decision.
(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11) On an appeal that is notified to the tribunal, the tribunal must consider whether the applicant or applicants ought to have been released from the liability.
(12) If the tribunal decides that the applicant or applicants ought not to have been released from the liability, the tribunal must dismiss the appeal.
(13) If the tribunal decides that the applicant or applicants ought to have been released from the liability, the applicant is, or applicants are, to be treated as having been released from the liability (but subject to any further appeal ...).
(1) This section applies in relation to a registered pension scheme if—
(a) there is no scheme administrator of the pension scheme and no-one who remains subject to the liabilities of the scheme administrator by virtue of section 271(4) (continuation of liability where no scheme administrator),
(b) the person who is, or all the persons who are, the scheme administrator of the pension scheme or remain so subject cannot be traced, or
(c) the person who is, or all the persons who are, the scheme administrator of the pension scheme or remain so subject are in serious default.
(2) Any person who assumes liability by reason of this section applying in relation to the pension scheme—
(a) is liable to pay any tax (and any interest on tax) due from the scheme administrator of the pension scheme by virtue of this Part, and
(b) is responsible for the discharge of all other obligations imposed on the scheme administrator of the pension scheme by or under this Part.
(3) In subsection (2)—
(a) the references in paragraph (a) to tax, and interest on tax, include any that has become due before this section applied in relation to the pension scheme and remains unpaid, and
(b) the reference in paragraph (b) to obligations includes any that have become due before this section applied in relation to the pension scheme and remain unsatisfied, other than any liability to pay a penalty which has become due before this section so applied.
(4) The following heads specify the persons who assume liability by reason of this section applying in relation to the pension scheme or by reason of section 272C(7) applying in relation to a liability; but if—
(a) a person assumes, or persons assume, liability by virtue of being specified under one head, and
(b) that person, or any of those persons, can be traced and is not in default,
no-one assumes liability by virtue of being specified under a later head.
Head 1
If there are one or more trustees of the pension 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 pension scheme, that person or each of those persons.
Head 3
If alive or still in existence, the person, or any of the persons, who established the pension scheme and any person by whom that person, or any of those persons, has been directly or indirectly succeeded in relation to the provision of benefits under the pension scheme.
Head 4
If the pension scheme is an occupational pension scheme, any sponsoring employer.
Head 5
If there are one or more trustees of the pension scheme who are not resident in the United Kingdom, that trustee or each of those trustees.
(5) Where a person assumes liability by reason of this section applying in relation to the pension scheme, the Inland Revenue must, as soon as is reasonably practicable, notify the person of that fact; but failure to do so does not affect the person’s liability.
(6) For the purposes of this section a person is in default if the person—
(a) has failed to pay all or any of the tax (or interest on tax) due from the person by virtue of this Part, or
(b) has failed to discharge any other obligation imposed on the person by or under this Part,
and a person in default is in serious default if the Inland Revenue considers the failure to be of a serious nature.
(1) This section applies in relation to a person (“P”) who is an independent trustee of a registered pension scheme.
(2) For the purposes of this section and section 272B an “independent trustee” is a trustee of a pension scheme—
(a) who is appointed by, or otherwise pursuant to, an order made—
(i) by the Pensions Regulator under section 7 of the Pensions Act 1995 or Article 7 of the Pensions (Northern Ireland) Order 1995 (appointment of trustees by the Pensions Regulator), or
(ii) by a court on an application made by the Pensions Regulator, and
(b) who is not a trustee of the pension scheme at any time before—
(i) the day on which the trustee's appointment as mentioned in paragraph (a) takes effect, or
(ii) if the trustee is appointed as mentioned in paragraph (a) on more than one occasion, the day on which the first appointment takes effect.
(3) In this section “the relevant day” means—
(a) the day on which P's appointment as trustee of the pension scheme as mentioned in subsection (2)(a) takes effect, or
(b) if P is appointed as trustee of the pension scheme as mentioned in subsection (2)(a) on more than one occasion, the day on which P's first appointment takes effect.
(4) If P is, or is one of the persons who are, the scheme administrator, P does not assume any liability falling within subsection (7) which P would otherwise assume (including by reason of section 272C(3) or (4)).
(5) Subsection (4) does not apply if P is, or is one of the persons who are, the scheme administrator at any time before the relevant day.
(6) In relation to any liability falling within subsection (7), in section 272(4) references to trustees or to persons who control the management of the pension scheme do not include P.
(7) The liabilities falling within this subsection are—
(a) liabilities for the following in respect of payments made (or treated as having been made) by the pension scheme on or before the relevant day—
(i) the short service refund lump sum charge;
(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(iii) the special lump sum death benefits charge;
(iv) the authorised surplus payments charge;
(v) the scheme sanction charge in respect of scheme chargeable payments falling within section 241(1)(a) or (b);
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) liabilities for the scheme sanction charge in respect of scheme chargeable payments treated under section 185A or 185F as having been made by the pension scheme in tax years earlier than the one in which the relevant day falls;
(d) any liability for the scheme sanction charge in respect of the relevant fraction of any scheme chargeable payment treated under section 185A as having been made by the pension scheme in the tax year in which the relevant day falls;
(e) where the pension scheme is treated under section 185F as having made a scheme chargeable payment in the tax year in which the relevant day falls and there is a relevant net gain, any liability for the scheme sanction charge in respect of the relevant amount;
(f) any liability to pay interest in respect of a liability mentioned in paragraphs (a) to (e) arising at any time.
(8) For the purposes of subsection (7)(d) “the relevant fraction” is—
A B
where—
A is the number of days in the tax year up to (and including) the relevant day, and
B is the number of days in the tax year.
(9) For the purposes of subsection (7)(e)—
(a) there is a “relevant net gain” if—
(i) the total amount of any gains treated under section 185F as accruing in the tax year on or before the relevant day, exceeds
(ii) the total amount of any losses treated under section 185F as so accruing, and
(b) “the relevant amount” is—
(i) the scheme chargeable payment, or
(ii) if that payment is greater than the excess of gains over losses mentioned in paragraph (a), the amount of that excess.
(10) Subsection (11) applies if—
(a) apart from that subsection, losses in relation to which section 185G(10) applies would be included in the total amount mentioned in subsection (9)(a)(ii), and
(b) the losses exceed the gains—
(i) which are included in the total amount mentioned in subsection (9)(a)(i), and
(ii) from which the losses can be deducted in accordance with section 185G(10).
(11) The losses are not to be included in the total amount mentioned in subsection (9)(a)(ii) so far as they exceed the gains.
272B Liabilities of scheme administrator appointed by independent trustee etc
(1) This section applies in relation to a person (“Q”) who is, or is one of the persons who are, the scheme administrator of a registered pension scheme where Q's appointment as such takes effect at a time when the pension scheme has one or more independent trustees.
(2) Q does not assume any liability falling within section 272A(7) which Q would otherwise assume.
(3) In relation to any liability falling within section 272A(7), in section 272(4) references to persons who control the management of the pension scheme do not include Q.
(4) Subsections (2) and (3) do not apply if Q is, or is one of the persons who are, the scheme administrator at any time before the relevant day.
(5) In this section, and in section 272A as it applies for the purposes of this section, “the relevant day” means the first day on which the pension scheme has an independent trustee (whether or not there are days between that day and the day on which Q's appointment takes effect on which the pension scheme has no independent trustees).
272C Former scheme administrator etc to retain liability
(1) This section applies in relation to a liability which, by reason of section 272A(4), is not assumed by P (in which case “the relevant day” is to be read in accordance with section 272A(3)).
(2) This section also applies in relation to a liability which, by reason of section 272B(2), is not assumed by Q (in which case “the relevant day” is to be read in accordance with section 272B(5)).
(3) The liability is to be retained or assumed by the person who is, or the persons who are, the scheme administrator immediately before the relevant day (unless dead or having ceased to exist).
(4) If there is no scheme administrator immediately before the relevant day, the liability is to be retained or assumed by the person who was, or the persons who were, the scheme administrator when there last was a scheme administrator before the relevant day (unless dead or having ceased to exist).
(5) Nothing in section 271 prevents a person from having (and continuing to have) the liability by reason of subsection (3) or (4).
(6) Subsection (7) applies if—
(a) no-one has the liability by reason of subsection (3) or (4),
(b) no-one who has the liability by reason of subsection (3) or (4) can be traced, or
(c) the person who has, or all the persons who have, the liability by reason of subsection (3) or (4) are in serious default (as determined in accordance with section 272(6)).
(7) The liability is to be assumed by the person or persons determined in accordance with section 272(4).
(8) Section 272(5) applies in relation to a person who assumes the liability by reason of subsection (7) as it applies in relation to a person who assumes a liability by reason of section 272.
(9) Nothing in this section prevents any person from being subject to the liability apart from this section (in addition to any person who is subject to the liability by reason of this section), and in particular the liability continues to be a liability of the scheme administrator for the purposes of section 271(2).
(10) If a person assumes the liability under section 271(2) at a time after P or Q's appointment as, or as one of the persons who are, the scheme administrator has ceased, the person who has, or the persons who have, the liability by reason of subsection (3) or (4) is, or are, released from the liability.
(11) A person who has, or persons who have, the liability by reason of subsection (3) or (4) may apply to an officer of Revenue and Customs to be released from the liability.
(12) Section 271(6) to (13) applies in relation to an application under subsection (11) as it applies in relation to an application under section 271(5).
(1) This section applies in relation to a registered pension scheme if—
(a) a person has, or persons have, assumed liability by reason of section 272 (trustees etc.) applying in relation to the pension scheme,
(b) the person has, or the persons have, become liable to pay tax (or interest on tax) which became due by virtue of section 239 (scheme sanction charge) or section 242 (de-registration charge) before section 272 applied in relation to the pension scheme,
(c) that person, or each of those persons, has failed (in whole or in part) to satisfy the liability, and
(d) that person, or each of those persons, has either died or ceased to exist or is a person in whose case the Inland Revenue considers the person’s failure to satisfy the liability to be of a serious nature.
(1A) This section also applies in relation to a registered pension scheme if—
(a) a person has, or persons have, by reason of section 272C(7) assumed a liability to pay tax (or interest on tax) by virtue of section 239 (scheme sanction charge) in respect of the whole or a part of a scheme chargeable payment falling within section 241(1)(b) or (c) made (or treated as having been made) by the pension scheme,
(b) that person, or each of those persons, has failed (in whole or in part) to satisfy the liability, and
(c) that person, or each of those persons, has either died or ceased to exist or is a person in whose case an officer of Revenue and Customs considers the person's failure to satisfy the liability to be of a serious nature.
(2) Any person who was a member of the pension scheme at any time during the relevant three-year period is liable to pay the appropriate share of the unpaid amount if—
(a) any of the conditions in subsection (5) is met, and
(b) the Inland Revenue notifies the person of the person’s liability to do so.
(3) “The relevant three-year period” is the period of three years ending with the date on which the liability to pay the tax arose.
(4) The “appropriate share of the unpaid amount”, in the case of a person, is—
AAP
AA
×
UT
where—
AA is an amount equal to aggregate of the amount of the sums and the market value of the assets held for the purposes of the pension scheme at the time when the liability to pay the tax arose,
AAP is an amount equal to so much of AA as is held for the purposes of such of the arrangements under the pension scheme as relate to the person or a person connected with the person, and
UT is so much of the tax (and any interest on it) as remains unpaid.
(5) The conditions referred to in subsection (2)(a) are—
(a) that the pension scheme ... was not an occupational pension scheme,
(b) that at any time during the relevant three-year period the pension scheme received a transfer value in which there were represented relevant personal pension contributions made by or in respect of the person,
(c) that the pension scheme was an occupational pension scheme and at any time during the relevant three-year period the person was a controlling director of a company that was a sponsoring employer, and
(d) that at any time during the relevant three-year period the pension scheme received a transfer value in which there were represented relevant controlling director contributions made by or in respect of the person.
(6) A notification under subsection (2)(b) may be included in an assessment in respect of a liability under this section; and such an assessment made in relation to an amount is not out of time if made within the period of three years beginning with the date on which the person assessed first became liable to pay the amount.
(7) “Relevant personal pension contributions” means contributions under a pension scheme (whether or not the pension scheme from which the transfer value was received) which ... was not an occupational pension scheme.
(8) “Relevant controlling director contributions” means contributions under an occupational pension scheme (whether or not the pension scheme from which the transfer value was received) made by reference to service (or remuneration in respect of service) as a controlling director of a company that was a sponsoring employer.
(9) A person is a “controlling director” of a company if the person is a director of the company and is within section 452(2)(b) of the Corporation Tax Act 2010 (director able to control 20% of ordinary share capital) in relation to the company.
(10) References to receipt of a transfer value by the pension scheme are to the transfer, so as to become held for the purposes of or to represent rights under the pension scheme, of any sums or assets held for the purposes of or representing accrued rights under any other pension scheme.
(11) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.
(1) The Treasury may make regulations in relation to cases where—
(a) an investment-regulated pension scheme holds an interest in taxable property,
(b) the pension scheme is non-UK resident, and
(c) the property is not located in the United Kingdom.
(2) The regulations may make provision for a member of the pension scheme for the purposes of whose arrangement the interest is held to be liable to the scheme sanction charge so far as relating to a scheme chargeable payment treated as made by the pension scheme—
(a) under section 185A (income from taxable property) by virtue of the pension scheme holding the interest in the property, or
(b) under section 185F (gains from taxable property) by virtue of a gain treated as accruing to the pension scheme in respect of the interest in the property.
(3) The regulations may make provision—
(a) for the member to be liable to all of the scheme sanction charge arising by virtue of the scheme chargeable payment or to the charge to such extent as the regulations may provide,
(b) for the charge to be apportioned between members of the pension scheme where the interest in the property is held for the purposes of more than one arrangement under the pension scheme, and
(c) for the scheme administrator not to be liable to the scheme sanction charge or not to be liable to the charge to such extent as the regulations may provide.
(4) The regulations may make provision for cases where—
(a) a member of a pension scheme would otherwise be liable to the scheme sanction charge arising by virtue of a scheme chargeable payment treated as made by the pension scheme under section 185F in a tax year,
(b) the member does not meet such conditions as to residence in the tax year as the regulations may prescribe,
(c) the member meets those conditions in a subsequent tax year, and
(d) such other conditions as the regulations may prescribe are met.
(5) The regulations may make provision for the member—
(a) not to be liable to the scheme sanction charge in the tax year in which the scheme chargeable payment is treated as made, but
(b) to be liable in a subsequent tax year to such extent as the regulations may provide to the scheme sanction charge arising by virtue of the payment.
(6) The regulations may—
(a) amend this Part (apart from this section),
(b) include provision having effect in relation to times before they are made,
(c) contain transitional provisions and savings, and
(d) make different provision for different cases.
(7) For the purposes of this section a pension scheme is non-UK resident if it is established in a country or territory outside the United Kingdom.
273A Insurance company liable as scheme administrator
(1) The Board of Inland Revenue may make regulations in relation to cases where an insurance company makes a payment of—
(a) a pension protection lump sum death benefit,
(b) an annuity protection lump sum death benefit, ...
(c) a drawdown pension fund lump sum death benefit, or
(d) a flexi-access drawdown fund lump sum death benefit,
which (by virtue of section 161(3) and (4)) is treated for the purposes of Chapter 3 as made by a registered pension scheme.
(2) The regulations may provide that the insurance company—
(a) is to be treated as the scheme administrator for the purposes of the operation of section 206 in relation to the lump sum death benefit, and
(b) is responsible for the discharge of all obligations imposed on the scheme administrator by or under this Part so far as related to the liability imposed by that section to pay tax in respect of it.
(3) Where an insurance company is liable to pay any tax or interest, or is responsible for the discharge of any other obligation, by virtue of regulations under this section, no other person is liable to pay that tax, or responsible for the discharge of that obligation, under sections 270 to 273.
273B Power of trustees or managers to make certain payments
(1) Subsection (2) applies to a payment by a registered pension scheme to or in respect of a person who is or has been a member of the scheme if it is paid in respect of a money purchase arrangement and is—
(a) a payment of drawdown pension,
(b) paid to purchase a short-term annuity,
(c) a payment of dependants' drawdown pension,
(d) paid to purchase a dependants' short-term annuity,
(e) a payment of nominees' drawdown pension,
(f) paid to purchase a nominees' short-term annuity,
(fa) paid to purchase a nominees' annuity,
(fb) paid to purchase a successors' annuity,
(g) a payment of successors' drawdown pension,
(h) paid to purchase a successors' short-term annuity,
(i) an uncrystallised funds pension lump sum,
(j) a flexi-access drawdown fund lump sum death benefit,
(k) a pension commencement lump sum where the person becomes entitled to it in connection with becoming entitled to income withdrawal (or where the person dies after becoming entitled to it but before becoming entitled to the income withdrawal in connection with which it was expected that the person would become entitled to the lump sum), or
(l) a trivial commutation lump sum death benefit where condition B in paragraph 20(1B) of Schedule 29 is met.
(2) The trustees or managers of the scheme may make the payment despite any provision of the rules of the scheme (however framed) prohibiting the making of the payment.
(1) The fact that any person is liable to pay any tax or interest, or is responsible for the discharge of any other obligation, under section 272 (trustees etc.), section 272C(7) or section 273 (members) does not relieve any other person of any liability to pay the tax or interest, or any obligation to discharge the obligation, arising—
(a) by reason of that other person being, or being one of the persons who is, the scheme administrator of the pension scheme, or
(b) under section 271(4) (continuation of liability where no scheme administrator), section 272C(3) or (4).
(2) Where a liability imposed on the scheme administrator of a registered pension scheme falls to be satisfied by two or more persons (whether or not they constitute the scheme administrator), they are jointly and severally liable.
(3) No liability to pay tax or interest, or other obligation, of any person in relation to a registered pension scheme arising—
(a) by reason of the person being, or being one of the persons who is, the scheme administrator of the pension scheme concerned, or
(b) under section 271(4), 272, 272C or 273 or regulations under section 273A,
is affected by the termination of the pension scheme or by its ceasing to be a registered pension scheme.
(1) In this Part “Master Trust scheme” means (subject to subsections (2) to (4)) a Master Trust scheme within the meaning of PSA 2017 or PSA(NI) 2021.
(2) Any provision of PSA 2017 or PSA(NI) 2021 under which a reference to a Master Trust scheme does not include a section of it that is a collective money purchase scheme (within the meaning of that Act) does not apply for the purposes of subsection (1).
(3) Section 1(2) of PSA 2017 and section 1(2) of PSA(NI) 2021 (which restrict the meaning of “Master Trust scheme” in the case of schemes that provide benefits other than money purchase benefits) do not apply for the purposes of subsection (1).
(4) Where, by virtue of section 40(2) of PSA 2017 or section 40(2) of PSA(NI) 2021, more than one pension scheme is treated as a single Master Trust scheme for the purposes of that Act, each of those pension schemes is a Master Trust scheme for the purposes of this Part.
(5) For the purposes of this Part a pension scheme is an “unauthorised Master Trust scheme” if—
(a) it is a Master Trust scheme the lawful operation of which, or of any section or part of which, requires authorisation under PSA 2017 or PSA(NI) 2021, or
(b) it is not a Master Trust scheme but, by virtue of section 40(1)(a) of PSA 2017 or section 40(1)(a) of PSA(NI) 2021, the lawful operation of the pension scheme, or of any section or part of it, requires authorisation under that Act,
and such authorisation has not been granted, or has been granted but has been withdrawn.
(6) In this section—
“PSA 2017” means the Pension Schemes Act 2017;
“PSA(NI) 2021” means the Pension Schemes Act (Northern Ireland) 2021.
(1) In this Part “collective money purchase scheme” means (subject to subsection (2)) a collective money purchase scheme within the meaning of Part 1 or 2 of the Pension Schemes Act 2021.
(2) A reference in this Part to a collective money purchase scheme is, in relation to a relevant divided pension scheme, a reference to the pension scheme as a whole (and is not a reference to any of its sections considered separately).
(3) In this section “relevant divided pension scheme” means a pension scheme which is divided into sections at least one of which is a collective money purchase scheme under subsection (1).
(4) For the purposes of this Part a pension scheme is an “unauthorised collective money purchase scheme” if—
(a) the lawful operation of the pension scheme, or (in the case of a relevant divided pension scheme) of any section of it, requires authorisation under Part 1 or 2 of the Pension Schemes Act 2021, and
(b) such authorisation has not been granted, or has been granted but has been withdrawn.
274ZZC Power to make provision about collective money purchase schemes
(1) The Commissioners for His Majesty’s Revenue and Customs may by regulations amend or otherwise modify any provision of this Part in its application in relation to—
(a) a collective money purchase scheme, or
(b) any benefits payable, or arrangements, under such a pension scheme.
(2) Regulations under this section—
(a) may make different provision for different cases;
(b) may include transitional or saving provision.
274ZA Schemes treated as occupational pension schemes
(1) This Part applies in relation to a pension scheme that—
(a) is established under section 67 of the Pensions Act 2008, and
(b) is not an occupational pension scheme,
as it applies in relation to an occupational pension scheme.
(2) This Part applies in relation to a pension scheme that—
(a) is a Master Trust scheme, and
(b) is not an occupational pension scheme,
as it applies in relation to an occupational pension scheme.
(3) This Part applies in relation to a pension scheme that—
(a) is a collective money purchase scheme, and
(b) is not an occupational pension scheme,
as it applies in relation to an occupational pension scheme.
274ZB Treatment of pension benefits reclaimed from reclaim fund etc
(1) Subsection (2) applies where an amount is paid out of an authorised reclaim fund in respect of transferred dormant eligible pension benefits.
(2) For the purposes of income tax and this Part, the amount paid out is to be treated as having been paid as a consequence of a right that is the same as the original rights, acquired as the original rights were acquired and having the same characteristics as those rights.
(3) The Commissioners for His Majesty’s Revenue and Customs may make regulations in relation to cases where—
(a) an amount is paid out of an authorised reclaim fund in respect of transferred dormant eligible pension benefits,
(b) the registered pension scheme from which the benefits were transferred was wound up before the payment of that amount, and
(c) the payment, or part of the payment, is treated (by virtue of subsection (2)) as being the payment by a registered pension scheme of—
(i) a pension protection lump sum death benefit,
(ii) an annuity protection lump sum death benefit,
(iii) a drawdown pension fund lump sum death benefit, or
(iv) a flexi-access drawdown fund lump sum death benefit.
(4) Regulations under subsection (3) may provide that a person specified in the regulations—
(a) is to be treated as the scheme administrator for the purposes of the operation of section 206;
(b) is responsible for the discharge of all obligations imposed on the scheme administrator by or under this Part so far as related to the liability imposed by that section to pay tax in respect of it.
(5) Regulations under subsection (3) may—
(a) make specific or general provision;
(b) make different provision for different cases.
(6) No liability to income tax arises in respect of income derived from investments or deposits—
(a) that are held by an authorised reclaim fund, and
(b) that relate to an amount transferred to the authorised reclaim fund in respect of transferred dormant eligible pension benefits.
(7) For the purposes of subsection (6), it does not matter when liability to income tax on income within that subsection would otherwise arise.
(8) Subsection (2) of section 186 (income) applies for the purposes of subsection (6) of this section as it applies for the purposes of subsection (1) of that section.
(9) For the purposes of this section—
“authorised reclaim fund” has the same meaning as in the Dormant Assets Acts 2008 to 2022;
“the original rights” are a person’s rights against the scheme administrator of a registered pension scheme, in respect of the benefits subsequently transferred by the scheme administrator to an authorised reclaim fund, immediately before the transfer;
“transferred dormant eligible pension benefits” means dormant eligible pensions benefits owing to a person that have been transferred by the scheme administrator of a registered pension scheme to an authorised reclaim fund with the result that section 5 of the Dormant Assets Act 2022 (transfer of eligible pension benefits to reclaim fund) applies (and references to benefits being transferred are to be construed accordingly).
(1) The Board of Inland Revenue may make regulations for and in connection with treating registered pension schemes to which this section applies as if they were a number of separate registered pension schemes for such of the purposes of this Part and of provision made under it as are prescribed by the regulations.
(2) This section applies to pension schemes prescribed, or of a description prescribed, by the regulations.
(3) The provision that may be made by the regulations may, in particular, include—
(a) provision as to who is to be treated as the scheme administrator in relation to each of the separate pension schemes, and
(b) any such other modifications of the provision made by and under this Part as appears appropriate in consequence of, or otherwise in connection with, provision made under subsection (1) (including provision so made by virtue of paragraph (a) of this subsection).
(4) The regulations may make different provision for different cases.
(5) Sections 226A and 226B of the Inheritance Tax Act 1984 (withholding of benefits and payment of inheritance tax by scheme administrator) are treated for the purposes of this section as provision made by this Part.
(1) In this Part “insurance company” means—
(a) a person who has permission under Part 4 of FISMA 2000 to effect or carry out contracts of long-term insurance, ...
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) “Contracts of long-term insurance” means contracts which fall within Part 2 of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544).
(1) For the purposes of this Part the relevant valuation factor in relation to any registered pension scheme, or any arrangement under a registered pension scheme, is 20.
(2) But the Inland Revenue and the scheme administrator of any registered pension scheme may agree that the relevant valuation factor in relation to the pension scheme, or any arrangement under the pension scheme, is to be a number greater than 20.
For the purposes of this Part the valuation assumptions in relation to a person, benefits and a date are—
(a) if the person has not reached such age (if any) as must have been reached to avoid any reduction in the benefits on account of age, that the person reached that age on the date, and
(b) that the person’s right to receive the benefits had not been occasioned by physical or mental impairment.