Office of Public Sector Information
PART 4 continued CHAPTER 6 continued
(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—
(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 Case VI of Schedule D, 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—
(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.
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
(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.
(5) Those persons are—
(a) 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.
(6) “Prescribed”, in relation to regulations, means prescribed by the regulations.
(1) The Inland Revenue may by notice require any person of a description prescribed by regulations made by the Board of Inland Revenue—
(a) to produce to the Inland Revenue, or to make available for inspection by the Inland Revenue, any documents within the person’s possession or power relating to any of the matters mentioned in subsection (3) which the Inland Revenue may reasonably require, and
(b) to provide to the Inland Revenue any particulars relating to any of those matters which the Inland Revenue may reasonably require.
(2) The Inland Revenue may by notice require any other person to produce to the Inland Revenue, or to make available for inspection by the Inland Revenue, any documents within the person’s possession or power which—
(a) relate to any of the matters mentioned in subsection (3), and
(b) were created not more than six years before the day on which the notice is given,
and which the Inland Revenue may reasonably require.
(3) The matters referred to in subsections (1) and (2) 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.
(4) In subsection (3)—
“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).
(5) A notice under this section must specify the period within which it is to be complied with; and that period may not end earlier than the period of 30 days beginning with the day on which the notice is given.
(6) A notice under subsection (2) must specify the pension scheme or employer-financed retirement benefits scheme to which it relates.
(7) The Inland Revenue must notify the scheme administrator of the pension scheme, or the responsible person in relation to theemployer-financed retirement benefits scheme, to which such a notice relates that the notice has been given no later than the end of the period of 30 days beginning with the day on which it is given.
(8) In subsection (7) “responsible person” has the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see section 399A of that Act).
(9) A person may comply with a notice under this section requiring the production of a document by producing a copy of the document.
(10) But where a person produces a copy of a document in compliance with a notice under this section the Inland Revenue may by notice require the production of the original for inspection within a period specified in the notice; and that period may not end earlier than the period of 30 days beginning with the day on which the notice is given.
(11) The Inland Revenue may take copies of, or make extracts from, any document produced in compliance with a notice under this section.
(12) A notice under this section does not require a person—
(a) to produce or make available for inspection any document, or
(b) to provide any particulars,
relating to any pending appeal by the person relating to tax.
(1) The person to whom a notice under section 252(1) or (2) (notices requiring documents or particulars) is given may appeal against any requirement imposed by the notice.
(2) The appeal must be brought within the period of 30 days beginning with the date on which the notice is given.
(3) The appeal is to the General Commissioners, except that the appellant may elect (in accordance with section 46(1) of TMA 1970) to bring the appeal before the Special Commissioners instead of the General Commissioners.
(4) Paragraphs 1, 2, 8 and 9 of Schedule 3 to TMA 1970 (rules for assigning proceedings to General Commissioners) have effect to identify the General Commissioners before whom an appeal under this section is to be brought, but subject to modifications specified in an order made by the Board of Inland Revenue.
(5) An appeal under this section against a requirement imposed by a notice must be brought within the period of 30 days beginning with the day on which the notice was given.
(6) The Commissioners before whom an appeal under this section is brought must consider whether the production of the document, or provision of the particulars, to which the appeal relates was reasonably required by the Inland Revenue.
(7) If they decide that it was, they must confirm the notice so far as relating to that requirement.
(8) If they decide that it was not, they must set aside the notice so far as relating to that requirement.
(9) If the notice is confirmed it has effect in relation to the requirement to which the appeal relates as if it specified as the period within which it must be complied with the period of 30 days beginning with the day on which the appeal was determined.
(10) The determination of the Commissioners is final and conclusive.
(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,
(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).
(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) liability to the lifetime allowance charge under section 217(2) (person to whom lump sum death benefit paid),
(d) the scheme sanction charge,
(e) liability under section 272 (trustees etc. liable as scheme administrator),
(f) liability under section 273 (member liable as scheme administrator), and
(g) liability under section 394 of ITEPA 2003 (benefit under employer-financed retirement benefits scheme: charge on responsible person).
(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) This section applies to regulations made by the Board of Inland Revenue under—
(a) section 220(5) (lifetime allowance enhancement: registration of pension credits),
(b) section 221(6) (lifetime allowance enhancement: individuals who are not always relevant UK individuals),
(c) section 224(9) (lifetime allowance enhancement: transfers from recognised overseas pension scheme),
(d) paragraph 7(1)(b) of Schedule 36 (lifetime allowance enhancement: primary protection),
(e) paragraph 12(1) of that Schedule (lifetime allowance: enhanced protection), and
(f) paragraph 18(6) of that Schedule (lifetime allowance enhancement: pre-commencement pension credits).
(2) The regulations to which this section applies are referred to in this Part as “enhanced lifetime allowance regulations”.
(3) Enhanced lifetime allowance regulations may include any provision that appears appropriate for securing that the correct tax is charged—
(a) by way of the lifetime allowance charge in respect of amounts crystallised by benefit crystallisation events, and
(b) in respect of the payment of lump sums by registered pension schemes.
(4) Enhanced lifetime 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 incorrect return required by a notice under section 250, or
(b) delivers any incorrect 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.
(1) A person who fails to comply with a notice under section 252 (notice requiring documents or particulars) is liable to a penalty not exceeding £300.
(2) If the failure continues after a penalty is imposed under subsection (1), the person 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 a person fraudulently or negligently—
(a) produces or makes available for inspection any incorrect documents, or
(b) provides any incorrect particulars,
in response to a notice under section 252, the person is liable to a penalty not exceeding £3,000.
(1) If the scheme administrator of a registered pension scheme fails to make a return for a quarter in accordance with section 254 (return of tax charged), the scheme administrator is liable—
(a) to a penalty or penalties of the relevant quarterly amount for each quarter (or part of a quarter) for which the failure continues, excluding any quarter after the fourth or for which a penalty under this paragraph has already been imposed, and
(b) if the failure continues beyond the fourth quarter (whether or not any penalty under paragraph (a) is imposed), to a penalty not exceeding the amount of income tax to which the scheme administrator is liable (otherwise than under section 239: scheme sanction charge) for the quarter for which the return is not made.
(2) In subsection (1)—
“quarter” means a period of three months ending with 31st March, 30th June, 30th September or 31st December, and
“the relevant quarterly amount”—
if the number of persons in respect of whom particulars should be included in the return by virtue of section 254(4)(b) is ten or less, is £100, and
if that number is greater than ten, is £100 for each ten such persons and an additional £100 where that number is not a multiple of ten.
(3) The Treasury may from time to time by order amend the amounts specified in the definition of “the relevant quarterly amount” in subsection (2).
(4) No penalty under subsection (1)(b) may be imposed unless—
(a) the amount of income tax to which the scheme administrator is liable (otherwise than under section 239) for the quarter concerned has been determined by the Inland Revenue, and
(b) the scheme administrator has been notified of that amount.
(5) In section 100(6)(a) of TMA 1970 (excessive penalty), after “1998” insert “or section 260(1)(b) of the Finance Act 2004”.
(6) If the scheme administrator of a registered pension scheme fraudulently or negligently makes an incorrect return under section 254, the scheme administrator is liable to a penalty not exceeding the difference between—
(a) the amount of the tax shown in the return, and
(b) the amount of the tax which should have been shown in the return,
or, if no tax is shown in the return, the amount of the tax which should have been shown in the return.
(7) 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 the persons who were the scheme administrator immediately before the registration was withdrawn.
(1) This section applies where an individual fraudulently or negligently—
(a) produces or makes available an incorrect document, or produces an incorrect certificate, in connection with any matter registered in accordance with enhanced lifetime 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 lifetime allowance at the time which is relevant for the purposes of this paragraph, or
(b) the amount of the pension commencement 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 lifetime allowance at the time which is relevant for the purposes of that paragraph (were the document or certificate correct or the information true) and whichever is the higher of—
(a) the actual amount of the individual’s lifetime allowance at that time, and
(b) the standard lifetime allowance at that time.
(5) The time which is relevant for the purposes of paragraph (a) of subsection (2)—
(a) where a benefit crystallisation event 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 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 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 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.
Finance Act 2004