The Taxation of Pension Schemes (Consequential Amendments) Order 2006
| Jurisdiction | UK Non-devolved |
| Citation | SI 2006/745 |
| Year | 2006 |
2006 No. 745
INCOME TAX
The Taxation of Pension Schemes (Consequential Amendments) Order 2006
Made 14th March 2006
Laid before the House of Commons 15th March 2006
Coming into force 6th April 2006
The Treasury make the following Order in exercise of the powers conferred upon them by section 281(2) of the Finance Act 20041.
Citation and commencement
1. This Order may be cited as the Taxation of Pension Schemes (Consequential Amendments) Order 2006 and shall come into force on 6th April 2006.
PART 1
Consequential Amendments to Primary Legislation
Amendment of the Telecommunications Act 1984
2. In section 72(3) of the Telecommunications Act 1984 (tax provisions) 2substitute—
“3 Where, in the discharge of any liability which is vested in the successor company by this Act, the successor company makes payments—
(a) to an occupational pension scheme,
(b) with a view to the provision of benefits authorised under Chapter 3 of Part 4 of the Finance Act 2004, and
(c) for persons who are employees of the Post Office,
the Taxes Acts shall have effect in relation to those payments as if those persons were employees of the successor company and in this subsection expressions which are used in Part 4 of the Finance Act 2004 have the same meanings as in that Part.”.
Amendment of the Electricity Act 1989
3.—(1) The Electricity Act 19893is amended as follows.
(2) In Schedule 14 (The Electricity Supply Pension Scheme)—
(a)
(a) in paragraph 1(1)—
(i) in sub-paragraph (a)(iii) after “will not prejudice its” insert “registration or”; and
(ii) in sub-paragraph (e) after “continues to be” insert “registered or”; and
(b)
(b) in paragraph 5(1)4, in the definition of “the relevant enactments” for “Chapter 1 of Part 14 of the Income and Corporation Taxes Act 1988 (retirement benefit schemes)” substitute “Part 4 of the Finance Act 2004 (pension schemes etc)”.
(3) In Schedule 15 (The Scottish Pension Schemes)—
(a)
(a) in paragraph 1(1)(d) after “continues to be” insert “registered or”; and
(b)
(b) in paragraph 5(1)5in the definition of “the relevant enactments” for “Chapter 1 of Part 14 of the Income and Corporation Taxes Act 1988 (retirement benefit schemes)” substitute “Part 4 of the Finance Act 2004 (pension schemes etc)”.
Amendment of the Social Security Contributions and Benefits Act 1992
4.—(1) The Social Security Contributions and Benefits Act 19926is amended as follows.
(2) In section 30DD(6) (incapacity benefit: reduction for pension payments)7, for “a contract or trust scheme approved under Chapter 3 of Part 14 of the Income and Corporation Taxes Act 1988 (retirement annuities).” substitute “an annuity contract or trust scheme approved under section 620 or 621 of the Income and Corporation Taxes Act 1988, or a substituted contract within the meaning of section 622(3) of that Act, which is treated as having become a registered pension scheme by virtue of paragraph 1(1)(f) of Schedule 36 to the Finance Act 2004”.
(3) In section 122(1) (interpretation of Parts 1 to 6 and supplementary provisions), in the definition of “payments by way of occupational or personal pension” for paragraph (d) and (e) substitute—
“(d)
“(d) under a pension scheme registered under section 153 of the Finance Act 2004; or”.
Amendment of the Social Security Contributions and Benefits (Northern Ireland) Act 1992
5.—(1) The Social Security Contributions and Benefits (Northern Ireland) Act 19928is amended as follows.
(2) In section 30DD(6) (incapacity benefit: reduction for pension payments)9, for “a contract or trust scheme approved under Chapter 3 of Part 14 of the Income and Corporation Taxes Act 1988 (retirement annuities).” substitute “an annuity contract or trust scheme approved under section 620 or 621 of the Income and Corporation Taxes Act 1988, or a substituted contract within the meaning of section 622(3) of that Act, which is treated as having become a registered pension scheme by virtue of paragraph 1(1)(f) of Schedule 36 to the Finance Act 2004”.
(3) In section 121(1) (interpretation of Parts I to V1 and supplementary provisions), in the definition of “payments by way of occupational or personal pension” for paragraph (d) and (e) substitute—
“(d)
“(d) under a pension scheme registered under section 153 of the Finance Act 2004; or”.
Amendment of the Railways Act 1993
6. In Schedule 11 to the Railways Act 1993 (pensions ) 10—
(a) in paragraph 1(1)11, in the definition of “eligible persons” omit sub-paragraph (b); and
(b) for paragraph 3(3)(a) substitute—
“(a)
“(a) which would prejudice registration of that scheme for the purposes of Part 4 of the Finance Act 2004 (pension schemes etc);”.
Amendment of the Pension Schemes Act 1993
7.—(1) The Pension Schemes Act 199312is amended as follows.
(2) In section 9(5A) (requirements for certification of schemes: general)13for paragraphs (a) and (b) substitute “is a registered pension scheme under section 153 of the Finance Act 2004”.
(3) In section 28(8) (ways of giving effect to protected rights)14in the definition of “the termination date” omit the words after “arrangement,”.
(4) In section 28A (requirements for interim arrangements)15—
(a)
(a) in subsection (1) at the end insert “but the member, widow, widower or surviving civil partner may forbear to receive such payments”;
(b)
(b) in subsection (2) omit the words after “partner”;
(c)
(c) in subsection (3) for the words after “months” substitute
“(“the aggregate payment”) must not be greater than—
(a) the amount specified by pension rule 5 in subsection (1) of section 165 of the Finance Act 2004 (pension rules) for the unsecured pension year which ends in that period of twelve months, where the member has not reached the age of 75,
(b) the amount specified by pension rule 7 in that subsection for the alternatively secured pension year which ends in that period of twelve months, where the member has reached the age of 75,
(c) the amount specified by pension death benefit rule 4 in subsection (1) of section 167 of the Finance Act 2004 (pension death benefit rules) for the unsecured pension year which ends in that period of twelve months, where subsection (2) applies and the member’s widow, widower or surviving civil partner has not reached the age of 75, or
(d) the amount specified by pension death benefit rule 6 in that subsection for the alternatively secured pension year, where subsection (2) applies and the member’s widow, widower or surviving civil partner has reached the age of 75.
This is subject to subsection (3A).”;
(d)
(d) after subsection (3) insert—
“3A The proportion of the aggregate payment which gives effect to a person’s protected rights must not be greater than the proportion of the value of the rights to money purchase benefits under the scheme that is attributable to the protected rights.”; and
(e)
(e) omit subsections (4) and (5).
(5) In section 33 (tax requirements to prevail over certification requirements) for “a scheme must comply if it is to qualify for tax-exemption or tax-approval” substitute “a registered scheme must comply under Part 4 of the Finance Act 2004”.
(6) In section 163 (exemption of certain schemes from rule against perpetuities)—
(a)
(a) for subsection (4)(b) substitute—
“(b)
“(b) to be a registered pension scheme under section 153 of the Finance Act 2004 or to be a scheme that may be expected to satisfy the conditions for registration.”; and
(b)
(b) omit subsection (5).
(7) In section 181(1) (general interpretation) omit the definitions of “tax-exemption” and “tax-approval”.
Amendment of the Pension Schemes (Northern Ireland) Act 1993
8.—(1) The Pension Schemes (Northern Ireland) Act 199316is amended as follows.
(2) In section 5(5A) (requirements for certification of schemes: general)17for paragraphs (a) and (b) substitute “is a registered pension scheme under section 153 of the Finance Act 2004”.
(3) In section 24(8) (ways of giving effect to protected rights)18in the definition of “the termination date” omit the words after “arrangement,”.
(4) In section 24A (requirements for interim arrangements)19—
(a)
(a) in subsection (1) at the end insert “but the member, widow, widower or surviving civil partner may forbear to receive such payments”;
(b)
(b) in subsection (2) omit the words after “partner”;
(c)
(c) in subsection (3) for the words after “months” substitute
“(“the aggregate payment”) must not be greater than—
(a) the amount specified by pension rule 5 in subsection (1) of section 165 of the Finance Act 2004 (pension rules) for the unsecured pension year which ends in that period of twelve months, where the member has not reached the age of 75,
(b) the amount specified by pension rule 7 in that subsection for the alternatively secured pension year which ends in that period of twelve months, where the member has reached the age of 75,
(c) the amount specified by pension death benefit rule 4 in subsection (1) of section 167 of the Finance Act 2004 (pension death benefit rules) for the unsecured pension year which ends in that period of twelve months, where subsection (2) applies and the member’s widow, widower or surviving civil partner has not reached the age of 75, or
(d) the amount specified by pension death benefit rule 6 in that subsection for the alternatively secured pension year, where subsection (2) applies and the member’s widow, widower or surviving civil partner has reached the age of 75.
This is subject to subsection (3A).”;
(d)
(d) after subsection (3) insert—
“3A The proportion of the...
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