The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023
| Jurisdiction | UK Non-devolved |
| Citation | SI 2023/113 |
| Year | 2023 |
2023 No. 113
Income Tax
Capital Gains Tax
Inheritance Tax
The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023
Made 2nd February 2023
Laid before the House of Commons 6th February 2023
Coming into force 6th April 2023
The Treasury make these Regulations in exercise of the powers conferred by section 11 of the Finance Act 20221.
PART 1
Introductory
Citation, commencement and effect
1.—(1) These Regulations may be cited as the Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023.
(2) These Regulations come into force on 6th April 2023.
(3) These Regulations have effect so as to modify enactments in their application in relation to a relevant person2.
Interpretation
2.—(1) In these Regulations—
“2015 scheme election” has the same meaning as in Chapter 2 of Part 1 of PSPJOA 20223;
“accounting-for-tax return” means a return under section 254 of FA 2004 (accounting for tax by scheme administrators)4;
“attributable” (in Chapter 4 of Part 2) has the meaning given by regulation 33(7);
“Chapter 1 legacy scheme” has the same meaning as in Chapter 1 of Part 1 of PSPJOA 2022;
“Chapter 1 new scheme” has the same meaning as in Chapter 1 of Part 1 of PSPJOA 2022;
“Chapter 1 scheme” has the same meaning as in Chapter 1 of Part 1 of PSPJOA 2022;
“HMRC” means His Majesty’s Revenue and Customs;
“judicial scheme” has the same meaning as in Chapter 2 of Part 1 of PSPJOA 2022;
“judicial 2015 scheme” has the same meaning as in Chapter 2 of Part 1 of PSPJOA 2022;
“local government new scheme” has the same meaning as in Chapter 3 of Part 1 of PSPJOA 2022;
“pension scheme input amount” has the meaning given by section 237B(2) of FA 20045;
“RPS(AP)R 2009” means the Registered Pension Schemes (Authorised Payments) Regulations 20096;
“RPS(PI)R 2006” means the Registered Pension Schemes (Provision of Information) Regulations 20067;
“the relevant Chapter 1 legacy scheme” has the same meaning as in Chapter 1 of Part 1 of PSPJOA 2022;
“relevant rectification provision” (except as provided in regulation 8) means—
(a) any of the following provisions of PSPJOA 2022—
(i) section 2(1) (roll-back of remediable service to Chapter 1 legacy scheme);
(ii) section 6(5) (effect of making new scheme benefits election in respect of pensioner or deceased member8of Chapter 1 legacy scheme);
(iii) section 10(4) (effect of making new scheme benefits election in respect of active or deferred member of Chapter 1 legacy scheme);
(iv) section 42(2) (effect of making legacy scheme election in respect of person with remediable service in judicial office);
(v) section 45(2) (effect of making 2015 scheme election in respect of person with remediable service in judicial office);
(b) any provision made by virtue of section 78 of that Act (local government schemes: power to pay final salary benefits);
“remediable service benefits9” (in Chapter 4 of Part 2) has the meaning given by regulation 32(6) and (7);
“remediable service rights” (in Chapter 2 of Part 2) has the meaning given by regulation 10(11) and (12);
“scheme pays notice” means a notice under section 237B(3) of FA 200410;
“voluntary arrangements” means arrangements under which a member of a registered pension scheme pays voluntary contributions to the scheme;
“voluntary contributions” has the same meaning as in Part 1 of PSPJOA 2022 (see section 110(1) of that Act).
(2) Expressions used in these Regulations, unless otherwise provided, have the same meaning as in Part 4 of FA 2004 (pension schemes etc).
PART 2
Modifications of Part 4 of the Finance Act 2004
CHAPTER 1
Contributions
Tax relief on pension contributions paid to Chapter 1 new scheme unaffected
3. In determining for the purposes of section 188 of FA 2004 (relief for contributions)11whether an individual is at any time an active member of a Chapter 1 new scheme, section 2(1) of PSPJOA 2022 (roll-back of remediable service to Chapter 1 legacy scheme) is to be ignored.
CHAPTER 2
Annual allowance
Adjusted income and threshold income calculated on basis of legacy scheme contributions
4.—(1) Paragraph (2) applies where—
(a)
(a) in any tax year, an individual has remediable service (“the rolled-back service”) that, by virtue of section 2(1) of PSPJOA 2022, is pensionable service under a Chapter 1 legacy scheme, and
(b)
(b) that provision has effect, in relation to the rolled-back service, for the purposes mentioned in section 2(3)(b) of that Act (effect of section 2(1) on amount of benefits payable).
(2) For the purposes of determining the individual’s adjusted income and threshold income for the tax year—
(a)
(a) any contributions (other than voluntary contributions) paid by the individual to a Chapter 1 new scheme in the tax year in respect of the rolled-back service are to be ignored, and
(b)
(b) the individual is to be treated as having paid to the Chapter 1 legacy scheme, in the tax year, the contributions that would have been payable by the individual under the scheme in the tax year in respect of the rolled-back service if the service had, at the time it took place, been pensionable service under the scheme.
(3) Any election in relation to the rolled-back service made by virtue of section 10 of PSPJOA 2022 (deferred choice to receive new scheme benefits) is to be ignored for the purposes of determining whether the condition in paragraph (1)(b) is met.
(4) Paragraph (5) applies where—
(a)
(a) a 2015 scheme election is made in relation to an individual, and
(b)
(b) in any tax year, the individual has remediable service (“the rolled-forward service”) that, by virtue of the election, is pensionable service under a judicial 2015 scheme.
(5) For the purposes of determining the individual’s adjusted income and threshold income for the tax year—
(a)
(a) any contributions (other than voluntary contributions) paid by the individual to a judicial legacy scheme in the tax year in respect of the rolled-forward service are to be ignored, and
(b)
(b) the individual is to be treated as having paid to the judicial 2015 scheme, in the tax year, the contributions that would have been payable by the individual under the scheme in the tax year in respect of the rolled-forward service if the service had, at the time it took place, been pensionable service under the scheme.
(6) In this regulation—
“adjusted income” means adjusted income for the purposes of section 228ZA of FA 2004 (tapered reduction of annual allowance: high income individual)12;
“threshold income” means threshold income for the purposes of that section of that Act.
Provision of information by scheme administrators to the Commissioners
5. Regulation 3 of RPS(PI)R 2006 (provision of information by scheme administrators to the Commissioners)13has effect as if, in paragraph (1), in the table, in the entry for reportable event 22, in the first column, at the end there were inserted “or is required to provide a member with a pension savings statement under regulation 14A(6ZC)”.
Annual provision of information by scheme administrator to member
6. Regulation 14A of RPS(PI)R 2006 (annual allowance: annual provision of information by scheme administrator to member)14has effect as if—
(a) in paragraph (4), after “(5)” there were inserted “, (5A)”;
(b) after paragraph (5) there were inserted—
“
5A Paragraph (5B) applies where—
(a) the relevant tax year is 2022-2023,
(b) the registered pension scheme is a Chapter 1 scheme, and
(c) the member has any remediable service in any earlier tax year.
5B The scheme administrator must provide the member with the pension savings statement for that tax year no later than the rectification deadline.
”;
(c) after paragraph (6) there were inserted—
“
6ZA Paragraph (6ZC) applies where—
(a) an individual is a member of a Chapter 1 scheme or a judicial scheme,
(b) the aggregate of the member’s pension input amounts for a pension input period changes as a result of the operation of a relevant rectification provision, and
(c) either—
(i) the conditions in paragraph (1)(a) and (b) are met in relation to the member and the pension input period, or
(ii) the member has already been provided with a pension savings statement for the tax year in which the pension input period ends.
6ZB Paragraph (6ZC) also applies where—
(a) an individual is a member of a local government new scheme,
(b) the member has already been provided with a pension savings statement for the tax year in which the pension input period ends, and
(c) the pension input amount shown on that pension savings statement is incorrect because the aggregate of the individual’s pension input amounts for a pension input period has changed as a result of the operation of regulation 14(1) of the Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023.
6ZC The scheme administrator—
(a) is not required to amend, so as to reflect the change, any pension savings statement previously provided under paragraph (1) relating to the member and the pension input period;
(b) must, no later than the rectification deadline, provide the individual with a statement (a “pension savings statement”) containing the information specified in paragraph (2) (whether or not the individual has previously been provided under paragraph (1) with a statement relating to the pension input period).
6ZD Subject to paragraph (6ZE), “the rectification deadline”, in relation to a member of a Chapter 1 scheme, a judicial scheme or a local government...
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