Office of Public Sector Information
PART 4 continued CHAPTER 7 continued
An individual who fails—
(a) to produce or make available any document required to be produced by enhanced lifetime allowance regulations,
(b) to produce any certificate required to be produced by enhanced lifetime allowance regulations, or
(c) to provide any information required to be provided by enhanced lifetime allowance regulations,
is liable to a penalty not exceeding £3,000.
(1) This section applies where—
(a) paragraph 12 of Schedule 36 (lifetime allowance charge: 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
(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 incorrect, 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 or winding-up lump sum death benefits (or both) 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, and
(b) each member in respect of whom a winding-up lump sum death benefit is paid under the pension scheme.
(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 the scheme administrator of a registered pension scheme is liable to the lifetime allowance charge in respect of a benefit crystallisation event.
(2) The scheme administrator may apply to the Inland Revenue for the discharge of the scheme administrator’s liability to the lifetime allowance charge in respect of the benefit crystallisation event on the ground mentioned in subsection (3).
(3) The ground is that—
(a) the scheme administrator reasonably believed that there was no liability to the lifetime allowance charge in respect of the benefit crystallisation event, 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 lifetime allowance charge in respect of the benefit crystallisation event.
(4) On receiving an application under subsection (2), the Inland Revenue must decide whether to discharge the scheme administrator’s liability to the lifetime allowance charge in respect of the benefit crystallisation event.
(5) The scheme administrator may apply to the Inland Revenue for the discharge of part of the scheme administrator’s liability to the lifetime allowance charge in respect of the benefit crystallisation event on the ground mentioned in subsection (6).
(6) The ground is that—
(a) the scheme administrator reasonably believed that the amount of the lifetime allowance charge in respect of the benefit crystallisation event was less than the actual amount, and
(b) in all the circumstances of the case, it would not be just and reasonable for the scheme administrator to be liable to an amount (“the excess amount”) equal to the difference between the amount which the scheme administrator believed to be the amount of the charge and the actual amount.
(7) On receiving an application under subsection (5), the Inland Revenue must decide whether to discharge the scheme administrator’s liability to the lifetime allowance charge in respect of the excess amount (or part of the excess amount).
(8) The discharge of the scheme administrator’s liability to the lifetime allowance charge (or to the excess amount or part of the excess amount) does not affect the liability of any other person to the lifetime allowance charge.
(9) The Inland Revenue must notify the scheme administrator 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.
(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 (assignment), 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.
(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.
(1) This section applies where the Inland Revenue—
(a) decides to refuse an application under section 267(2) (discharge of liability to lifetime allowance charge) or section 268 (discharge of liability to unauthorised payments surcharge or scheme sanction charge), or
(b) on an application under section 267(5), decides to refuse the application or to discharge the applicant’s liability to the lifetime allowance charge in respect of part only of the excess amount.
(2) The applicant may appeal against the decision.
(3) The appeal is to the General Commissioners, except that the person 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 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) The Commissioners before whom an appeal under subsection (1)(a) is brought must consider whether the applicant’s liability to the lifetime allowance charge, unauthorised payments surcharge or scheme sanction charge ought to have been discharged.
(7) If they consider that the applicant’s liability ought not to have been discharged, they must dismiss the appeal.
(8) If they consider that the applicant’s liability ought to have been discharged, they must grant the application.
(9) The Commissioners before whom an appeal under subsection (1)(b) is brought must consider whether the applicant’s liability to the lifetime allowance charge ought to have been discharged in respect of the excess amount or a greater part of the excess amount.
(10) If they consider that the applicant’s liability ought not to have been discharged in respect of the excess amount or a greater part of the excess amount, they must dismiss the appeal.
(11) If they consider that the applicant’s liability ought to have been discharged in respect of the excess amount or a greater part of the excess amount, they must discharge the applicant’s liability in respect of the excess amount or that part of the excess amount.
(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 cannot be the person who is, or one of the persons who are, the scheme administrator of a pension scheme unless the person—
(a) is resident in the United Kingdom or another state which is a member State or a non-member EEA State, and
(b) has made the required declaration to the Inland Revenue.
(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, whether resident in the United Kingdom or another state which is a member State or a non-member EEA State.
(4) “Non-member EEA State” means a State which is a contracting party to the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 (as adjusted by the Protocol signed at Brussels on 17th March 1993) but which is not a member State.
(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) The appeal is to the General Commissioners, except that the applicant or applicants may elect (in accordance with section 46(1) of TMA 1970) to bring the appeal before the Special Commissioners instead of the General Commissioners.
(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) 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.
(11) The Commissioners before whom an appeal under this section is brought must consider whether the applicant or applicants ought to have been released from the liability.
(12) If they decide that the applicant or applicants ought not to have been released from the liability, they must dismiss the appeal.
(13) If they decide 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 or any determination on, or in consequence of, a case stated).
(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; 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 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.
(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—
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 established by a person or body specified in section 154(1)(a) to (g) (insurance companies etc.) and 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 established by a person or body specified in section 154(1)(a) to (g) and 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 417(5)(b) of ICTA (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) Section 839 of ICTA (connected persons) applies for the purposes of this section.
(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.) 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).
(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 or 273,
is affected by the termination of the pension scheme or by its ceasing to be a registered pension scheme.
(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, or
(b) an EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to FISMA 2000 (certain direct insurance undertakings) which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule) to effect or carry out contracts of long-term insurance.
(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.
(1) For the purposes of this Part the market value of an asset held for the purposes of a pension scheme is to be determined in accordance with section 272 of TCGA 1992.
(2) Where an asset held for the purposes of a pension scheme is a right or interest in respect of any money lent (directly or indirectly) to any relevant associated person, the value of the asset is to be treated as being the amount owing (including any unpaid interest) on the money lent.
(3) The following are “relevant associated persons”—
(a) any employer who has at any time (whether or not before the making of the loan) made contributions under the pension scheme,
(b) any company connected (at the time of the making of the loan or subsequently) with any such employer,
(c) any person who has at any time (whether or not before the making of the loan) been a member of the pension scheme, and
(d) any person connected (at the time of the making of the loan or subsequently) with any such person.
(4) Section 839 of ICTA (connected persons) applies for the purposes of this section.
(1) In this Part—
“the Board of Inland Revenue” means the Commissioners of Inland Revenue,
“charity” has the same meaning as in section 506 of ICTA,
“employee” and “employer” have the same meaning as in the employment income Parts of ITEPA 2003 (see sections 4 and 5 of that Act) but include (respectively) a former employee and a former employer (and “employment” is to be read accordingly),
“the Inland Revenue” means any officer of the Board of Inland Revenue,
“normal minimum pension age” means—
before 6th April 2010, 50, and
on and after that date, 55,
“pension credit” and “pension debit” have the same meaning as in Chapter 1 of Part 4 of WRPA (see section 46(1) of that Act) or Chapter 1 of Part 5 of WRP(NI)O 1999 (see Article 43(1) of that Order),
“pension sharing order or provision” means any order or provision mentioned in section 28(1) of WRPA 1999 or Article 25(1) of WRP(NI)O 1999,
“personal representatives”, in relation to a person who has died, means—
in the United Kingdom, persons responsible for administering the estate of the deceased, and
in a country or territory outside the United Kingdom, the persons having functions under its law equivalent to those of administering the estate of the deceased,
“retail prices index” means the general index (for all items) published by the Office for National Statistics or, if that index is not published for a relevant month, any substituted index or index figures published by that Office,
“tax year” means, in relation to income tax, a year for which any Act provides for income tax to be charged, and
“the tax year 2006-07” means the tax year beginning on 6th April 2006 (and any corresponding expression in which two years are simultaneously mentioned is to be read in the same way).
(2) In this Part references to payments made, or benefits provided, by a pension scheme are to payments made or benefits provided from sums or assets held for the purposes of the pension scheme.
(3) For the purposes of this Part the sums and assets held for the purposes of an arrangement under a pension scheme are so much of the sums and assets held for the purposes of the pension scheme under which the arrangement is made as are properly attributable, in accordance with the provisions of the pension scheme and any just and reasonable apportionment, to the arrangement.
(1) In this Part—
“NIA 1965” means the National Insurance Act 1965 (c. 51),
“NIA(NI) 1966” means the National Insurance Act (Northern Ireland) 1966 (c. 6 (N.I.)),
“TMA 1970” means the Taxes Management Act 1970 (c. 9),
“ICTA 1970” means the Income and Corporation Taxes Act 1970 (c. 10),
“ICTA” means the Income and Corporation Taxes Act 1988 (c. 1),
“SSCBA 1992” means the Social Security Contributions and Benefits Act 1992 (c. 4),
“SSCB(NI)A 1992” means the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7),
“TCGA 1992” means the Taxation of Chargeable Gains Act 1992 (c. 12),
“WRPA 1999” means the Welfare Reform and Pensions Act 1999 (c. 30),
“WRP(NI)O 1999” means the Welfare Reform and Pensions (Northern Ireland) Order 1999 (S.I. 1999/ 3147 (N.I. 11)),
“FISMA 2000” means the Financial Services and Markets Act 2000 (c. 8), and
“ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003 (c. 1).
Finance Act 2004