The Registered Pension Schemes (Authorised Payments) Regulations 2009
| Jurisdiction | UK Non-devolved |
| Citation | SI 2009/1171 |
2009 No. 1171
Income Tax
The Registered Pension Schemes (Authorised Payments) Regulations 2009
Made 6th May 2009
Laid before the House of Commons 8th May 2009
Coming into force in accordance with regulation 1
The Commissioners for Her Majesty’s Revenue and Customs make the following Regulations in exercise of the powers conferred by section 164(1)(f) and (2) of the Finance Act 20041, and now exercisable by them2:
PART 1
INTRODUCTION
Citation, commencement and effect
1.—(1) These Regulations may be cited as the Registered Pension Schemes (Authorised Payments) Regulations 2009 and shall come into force on 1st June 2009.
(2) These Regulations shall have effect—
(a)
(a) for payments of a description within Part 2, in relation to payments made on or after 1st December 2009; and
(b)
(b) for payments of a description within Part 3 or Part 4, in relation to payments made on or after 6th April 20063.
Interpretation
2.—(1) Any reference in these Regulations to a numbered section or a paragraph of a Schedule, without more, is a reference to the section or paragraph of the Finance Act 2004 bearing that number.
(2) Any reference in these Regulations to a person’s being entitled to a payment—
(a)
(a) if it is a payment of pension (or intended to be such a payment), shall be construed in accordance with section 165(3) (pension rules)4, and related expressions shall be construed accordingly;
(b)
(b) if it is a payment of a lump sum (or intended to be such a payment), shall be construed in accordance with section 166(2) (lump sum rule)5, and related expressions shall be construed accordingly.
(3) For the purpose of these Regulations, whether a person is connected with another person is determined in accordance with section 993 of the ITA 2007 (meaning of “connected” persons)6.
(4) For the purpose of these Regulations,
(a)
(a) a pension scheme is related to another pension scheme if each of them is—
(i) a registered pension scheme7that is an occupational pension scheme8or a public service pension scheme9, and
(ii) a pension scheme relating to the same employment; but
(b)
(b) if the context is whether a person is or is not a controlling director of a sponsoring employer10of a pension scheme, only registered pension schemes that are occupational pension schemes are related to other such pension schemes.
(5) In these Regulations—
“controlling director” has the meaning given by section 273(9) (members liable as scheme administrator);
“excluded transfer” means—
(a) a recognised transfer11; or
(b) any other transfer to the pension scheme of any sums or assets held for the purposes of, or representing accrued rights under, another pension scheme.
Prescribed payments and taxation
3. A payment by a registered pension scheme to or in respect of a member that is described in Part 2 of these Regulations—
(a) is a payment of a prescribed description for the purposes of section 164(1)(f) (authorised member payments);
(b) if paid to the member, shall be treated as a trivial commutation lump sum paid to the member for the purposes of Part 9 of ITEPA 2003 (pension income)12; and
(c) if not paid to the member, shall be treated as a trivial commutation lump sum death benefit paid to the recipient for the purposes of Part 9 of ITEPA 200313.
4. A payment by a registered pension scheme that is described in Part 3 of these Regulations, to the extent specified in the regulation concerned—
(a) is a payment of a prescribed description for the purposes of section 164(1)(f) of the Finance Act 2004;
(b) shall be treated as pension paid to the recipient under a registered pension scheme for the purposes of Part 9 of ITEPA 2003; and
(c) shall be treated for those purposes as pension accruing in the tax year in which it is paid.
5. A payment by a registered pension scheme that is described in Part 4 of these Regulations—
(a) is a payment of a prescribed description for the purposes of section 164(1)(f) of the Finance Act 2004; and
(b) shall be treated as a pension commencement lump sum paid under a registered pension scheme for the purposes of Part 9 of ITEPA 200314.
PART 2
COMMUTATION PAYMENTS
Payment after relevant accretion
6.—(1) A payment made after there has been a relevant accretion in respect of the member if—
(a)
(a) the payment extinguishes the member’s entitlement to benefits under the pension scheme;
(b)
(b) it does not exceed £2,000;
(c)
(c) it does not exceed the value of the accretion; and
(d)
(d) it is made no later than the relevant date.
(2) Regulation 7 defines “relevant accretion”.
(3) In a case where the accretion is a relevant accretion by virtue of having occurred after the event described in regulation 7(2)(b), the scheme pension or annuity concerned shall be ignored in determining whether the member’s entitlement to benefits under the scheme has been extinguished.
(4) For the purposes of paragraph (1)(d) the relevant date is—
(a)
(a) if the accretion has occurred before 1st December 2009, 1st June 2010, otherwise
(b)
(b) six months after the date the accretion occurs.
Meaning of “relevant accretion”
7.—(1) The following are relevant accretions for the purposes of regulation 6 if they occur after either of the events mentioned in paragraph (2)—
(a)
(a) a payment (“the payment in”) is received by the scheme in respect of the member, other than a contribution into the pension scheme or an excluded transfer into the pension scheme;
(b)
(b) there is an allocation to the arrangement15in the amount by which the value of the sums and assets held for the purposes of the arrangement exceeds the value the scheme administrator16had believed they had; and
(c)
(c) the scheme administrator becomes aware that the member is entitled to a benefit under the pension scheme, provided—
(i) the scheme administrator had not been aware of the entitlement before the event in paragraph (2), and
(ii) the scheme administator could not reasonably have been expected to be aware of it before that event.
(2) The events are—
(a)
(a) there is a recognised transfer to another registered pension scheme or to a qualifying recognised overseas pension scheme17in respect of the member; and
(b)
(b) a scheme pension18or annuity is purchased for the member by the pension scheme from an insurance company19.
(3) In order for the purchase of a scheme pension or annuity on or after 6th April 2006 to be an event within paragraph (2)(b), all or a part of the member’s lifetime allowance20must be available at the time of the purchase.
(4) The value of a relevant accretion is—
(a)
(a) in the case of a payment in within paragraph (1)(a), the amount of the payment; or
(b)
(b) in the case of an allocation within paragraph (1)(b), the amount by which the value of the sums and assets exceeds the value they had been believed to have;
(c)
(c) in the case described in paragraph (1)(c), the value of the benefit to which the member is entitled.
(5) In paragraph (1)(a), “contribution” does not include any amount mentioned in section 188(3) (c) (rebates and minimum contributions paid by the Board of Inland Revenue21).
Payments under the Financial Services Compensation Scheme
8.—(1) A payment made by way of compensation under the Financial Services Compensation Scheme if—
(a)
(a) the payment does not exceed £2,000; and
(b)
(b) it extinguishes the member’s entitlement to benefits under the pension scheme.
(2) The reference in paragraph (1) to the Financial Services Compensation Scheme is to the scheme established by Part 15 of the Financial Services and Markets Act 200022.
Payments to or in respect of members who were untraceable
9.—(1) A payment made to or in respect of a member who has reached the age of 75 if—
(a)
(a) at the time the member reached the age of 75 the scheme administrator had been unable to ascertain the member’s whereabouts despite having taken reasonable steps to do so;
(b)
(b) the scheme administrator had received no communication from the member for at least 5 years before the date on which the scheme administrator had discovered the member’s whereabouts or, if the member had died, had learned of the death;
(c)
(c) either of the conditions in paragraph (2) is satisfied;
(d)
(d) the payment is made no later than the relevant date;
(e)
(e) the payment does not exceed £2,000; and
(f)
(f) the payment—
(i) extinguishes the member’s entitlement to benefits under the pension scheme, or
(ii) if made after the member’s death, represents the total value of all sums and assets held for the purposes of the scheme in respect of the member.
(2) The conditions mentioned in paragraph (1)(c) are—
(a)
(a) paragraph 8(2) of Schedule 28 (member’s unsecured pension fund) applies in relation to the member and the arrangement and none of the sums or assets held for the purposes of the arrangement are member-designated funds23immediately before it applies;
(b)
(b) the arrangement is a defined benefits arrangement24and no scheme pension is being paid to the member by the scheme making the payment or any related scheme.
(3) For the purposes of paragraph (1)(d) the relevant date is the later of—
(a)
(a) 1st June 2010; and
(b)
(b) 12 months after the date on which the scheme administrator had discovered the member’s whereabouts or, if the member had died, had...
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