Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Schedule 1 has effect. In that Schedule—Part 1 contains provision about flexibly accessing certain drawdown funds, Part 2 contains provision about removing certain restrictions relating to annuities to which individuals become entitled on or after 6 April 2015, Part 3 contains provision about authorising one-off pension payments not made through a drawdown fund, Part 4 contains provision about charging the annual allowance charge, in cases where an individual has flexibly accessed pension rights, on inputs in respect of money purchase arrangements (and some hybrid arrangements) so far as they exceed £10,000 in a tax year, Part 5 contains further provision in connection with the taxation of pensions, Part 6 contains provision about the giving of information, and Part 7 contains provision about overseas pensions.
Chapter 5 of Part 4 of FA 2004 (registered pension schemes: tax charges) is amended as follows.
In section 206(1) (special lump sum death benefits charge arises where certain lump sums are paid by a registered pension scheme) after “registered pension scheme” insert “ in respect of a member who had reached the age of 75 at the date of the member's death ”.
In section 206(4) (special lump sum death benefits charge: rate of charge) for “55%” substitute “ 45% ”.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The amendments made by this section apply to lump sums paid on or after 6 April 2015.
Schedule 2 has effect.
This Act may be cited as the Taxation of Pensions Act 2014.
In this Act—
“FA”, followed by a year, means the Finance Act of that year, and
“ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003.
The Commissioners for Her Majesty's Revenue and Customs may by regulations make such amendments of Part 4 of FA 2004, or Part 9 of ITEPA 2003, as the Commissioners consider appropriate in consequence of this Act.
For the purposes of section 282 of FA 2004 and section 1014 of the Income Tax Act 2007 (orders and regulations), the power under subsection (3) of this section is treated as a power under Part 4 of FA 2004 (so that section 282, and not section 1014, applies in relation to regulations made under subsection (3)).
Pension flexibility etc
Drawdown pensions
Annual cap on pension drawdown abolished for flexi-access drawdown funds
In section 165(1) of FA 2004 (the pension rules) in pension rule 5 (annual cap on drawdown pension) after “in each drawdown pension year” insert “ from, or under a short-term annuity purchased using sums or assets out of, the member's drawdown pension fund ”.
In paragraph 8(1A) of Schedule 28 to FA 2004 (meaning of “member's drawdown pension fund”: funds designated as available for drawdown)—
in the opening words omit “they”,
in paragraph (a) for “have been designated at any time” substitute “ they have, at any time before 6 April 2015, been designated ”,
before the “or” at the end of paragraph (a) insert—, and
in paragraph (b)—
at the beginning insert “ they ”, and
for “sums or assets which have been so designated or” substitute “ member-designated funds under paragraph (a) or (aa) or from sums or assets ”.
Flexi-access drawdown funds
In Schedule 28 to FA 2004 after paragraph 8 insert—
Sub-paragraph (1), so far as it inserts the new paragraph 8D, has effect in relation to—
cases where both the designation and transfer are made after the end of 2 months beginning with the day on which this Act is passed, and
cases not within paragraph (a) where—
the transfer is made before 6 April 2015 and the designation is made on or after 6 April 2015, or
the designation is made before 6 April 2015 and the transfer is made on or after 6 April 2015.
In Schedule 28 to FA 2004 after paragraph 22 insert—
Sub-paragraph (1), so far as it inserts the new paragraph 22D, has effect in relation to—
cases where both the designation and transfer are made after the end of 2 months beginning with the day on which this Act is passed, and
cases not within paragraph (a) where—
the transfer is made before 6 April 2015 and the designation is made on or after 6 April 2015, or
the designation is made before 6 April 2015 and the transfer is made on or after 6 April 2015.
Further drawdown amendments
FA 2004 is amended as follows.
In section 167(1) (the pension death benefit rules) in pension death benefit rule 4 (annual cap on dependants' drawdown pension) after “in each drawdown pension year” insert “from, or under a dependants' short-term annuity purchased using sums or assets out of, the dependant's drawdown pension fund”.
In section 168(1), in the lump sum death benefit rule, after paragraph (e) insert—.
In section 169(1D) (regulations about transfers of drawdown funds) after paragraph (a) insert.
In section 172B(2) (rights of a “relevant member”)—
omit the “or” at the end of paragraph (aa), and
after paragraph (b) insert
In section 172B(7A) (section does not apply to certain increases in rights) after “dependant's drawdown pension fund” (in both places) insert “ or dependant's flexi-access drawdown fund ”.
In section 182(3) (value of arrangement for purposes of borrowing limits)—
after paragraph (a) insert—, and
in paragraph (b) after “dependants' drawdown pension funds” insert “or dependants' flexi-access drawdown funds”.
In section 182(5) (determining whether rights are uncrystallised) after “the person's drawdown pension fund” insert “ or the person's flexi-access drawdown fund ”.
In section 206(1) (payments which trigger special lump sum death benefits charge)—
omit the “or” at the end of paragraph (b), and
after paragraph (c) insert.
In section 211(1) (value of crystallised rights for purposes of section 210)—
omit the “and” at the end of paragraph (a), and
after paragraph (b) insert
In section 212(2) (value of uncrystallised rights for purposes of section 210: rights which are not uncrystallised) after “the member's drawdown pension fund” insert “ or the member's flexi-access drawdown fund ”.
In section 216(1) (benefit crystallisation events and amounts crystallised), in column 2 of the entry in the table for benefit crystallisation event 5A, after “representing the individual's drawdown pension fund under the arrangement” insert “ (if any), plus the aggregate of the amount of the sums and the market value of the assets representing the individual's flexi-access drawdown fund under the arrangement (if any), ”.
In section 273A(1) (regulations about certain payments by insurance companies)—
omit the “or” at the end of paragraph (b), and
after paragraph (c) insert.
In section 280(2) (index of defined expressions) at the appropriate places insert—
In paragraph 7 of Schedule 28 (meaning of “income withdrawal”) at the end insert “ or from the member's flexi-access drawdown fund in respect of an arrangement ”.
In paragraph 21 of Schedule 28 (meaning of “dependants' income withdrawal”) at the end insert “ or from the dependant's flexi-access drawdown fund in respect of an arrangement ”.
In paragraph 22(2) of Schedule 28 (meaning of “dependant's drawdown pension fund”: funds designated as available for dependants' drawdown pension)—
in the opening words omit “they”,
in paragraph (a) for “have been designated at any time” substitute “ they have, at any time before 6 April 2015, been designated ”,
before the “or” at the end of paragraph (a) insert—, and
in paragraph (b)—
at the beginning insert “ they ”, and
for “sums or assets which have been so designated or” substitute “ dependant-designated funds under paragraph (a) or (aa) or from sums or assets ”.
In paragraph 3(5)(a) and (8)(a) of Schedule 29 (deductions when calculating “applicable amount”) after “of the member's drawdown pension fund” insert “ or of the member's flexi-access drawdown fund ”.
In paragraph 17 of Schedule 29 (meaning of “drawdown pension fund lump sum death benefit”)—
in sub-paragraph (1)(a) for “under” substitute “ to be paid from the member's drawdown pension fund in respect of ”, and
in sub-paragraph (2)(c) after “at the date of the dependant's death” insert “ to be paid from the dependant's drawdown pension fund ”.
In Schedule 29 after paragraph 17 insert—
In paragraph 18 of Schedule 29 (meaning of “charity lump sum death benefit”)—
in sub-paragraph (1)(c) after “in respect of an arrangement” insert “ , or in respect of the member's flexi-access drawdown fund in respect of an arrangement, ”,
in sub-paragraph (2)(d) after “dependant's drawdown pension fund” insert “ , or the dependant's flexi-access drawdown fund, ”, and
in sub-paragraph (4) after “drawdown pension fund” insert “ , or flexi-access drawdown fund, ”.
In paragraph 4(1) of Schedule 32 (supplementary provision about benefit crystallisation event 4) at the end insert “ or flexi-access drawdown fund ”.
In paragraph 17(2) of Schedule 32 (supplementary provision about benefit crystallisation event 8) after “the individual's drawdown pension fund” insert “ or flexi-access drawdown fund ”.
In paragraph 20(4) of Schedule 36 (lifetime allowance: deemed crystallisation: value of rights to pre-5 April 2006 drawdown pensions)—
in paragraph (b) (arrangements where section 165(3A) of FA 2004 applies) for “applies” substitute “ applied at any time before 6 April 2015 ”, and
after paragraph (b) insert
The amendments made by sub-paragraph (1) come into force on 6 April 2015.
In paragraph 29(3) of Schedule 36 (modifications of paragraph 3 of Schedule 29 for cases involving protected lump sum rights), in the sub-paragraph (5)(a) treated as substituted in paragraph 3 of Schedule 29, after “ member's drawdown pension fund ” insert “ or flexi-access drawdown fund ”.
Related amendment in the Pension Benefits Regulations 2006
In regulation 2(1) of the Pension Benefits (Insurance Company Liable as Scheme Administrator) Regulations 2006 (S.I. 2006/136) (payments in relation to which the insurance company is liable as scheme administrator)—
omit the “or” at the end of sub-paragraph (b), and
after sub-paragraph (c) insert
The amendment made by sub-paragraph (1) is to be treated as having been made by the Commissioners for Her Majesty's Revenue and Customs in exercise of their powers under section 273A of FA 2004 (as amended by this Schedule).
Related amendment in Part 9 of ITEPA 2003
In section 636A of ITEPA 2003 (taxation of pension lump sums)—
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
in subsection (7) (definitions) after “ “drawdown pension fund lump sum death benefit”,” insert—.
Repeal and revocation of provisions relating to pre-6 April 2015 flexible drawdown
In FA 2004 omit—
in section 165(1), in pension rule 5, the second sentence,
section 165(3A) and (3B),
in section 167(1), in pension death benefit rule 4, the second sentence,
section 167(2A) and (2B),
in Schedule 28—
paragraph 10(11),
paragraph 10A(11),
paragraphs 14A to 14E,
paragraph 24(11),
paragraph 24A(9), and
paragraphs 24C to 24G, and
in Schedule 34, paragraph 4A.
In consequence of sub-paragraph (1), in Schedule 16 to FA 2011 omit paragraphs 1(3), 8(12), 10, 11(3), 18(12), 20 and 81(3).
The Registered Pension Schemes (Prescribed Requirements of Flexible Drawdown Declaration) Regulations 2011 (S.I. 2011/1792) are revoked.
The amendments made by sub-paragraphs (1) to (3) come into force on 6 April 2015.
Related amendments in regulations
The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (S.I. 2006/207) are amended as follows.
In regulations 6 and 7 omit paragraph (b) and the “and” preceding it.
In regulation 14(3)—
after paragraph (b) insert—,
omit paragraph (da),
after paragraph (e) insert—, and
omit paragraph (fc).
The amendments made by sub-paragraphs (2) and (3) come into force on 6 April 2015.
The amendments made by sub-paragraph (3)(a) and (c) are to be treated as having been made by the Commissioners for Her Majesty's Revenue and Customs under such of the powers conferred on them by Schedule 34 to FA 2004 (as amended by this Schedule) as are applicable.
Regulation 12 of the Registered Pension Schemes (Transfer of Sums and Assets) Regulations 2006 (S.I. 2006/499) (drawdown funds—recognised transfers) is amended as follows.
In the heading after “fund” (in both places) insert “ or flexi-access drawdown fund ”.
In paragraph (1) (transfer recognised only if transferred items are only items held under arrangement to which transfer made) after “represent a” insert “ member's flexi-access drawdown fund, dependant's flexi-access drawdown fund, ”.
In paragraph (2) (transferred items treated for certain purposes as remaining held under fund from which transfer made) before sub-paragraph (a) insert—.
In table 3, in the heading, after “Prescribed purposes—” insert “ member's flexi-access drawdown fund or ”.
In table 3 omit the entry for section 165(3A) of FA 2004.
In table 4 omit the entry for section 167(2A) of FA 2004.
The amendments made by this paragraph—
come into force on 6 April 2015, and
are to be treated as having been made by the Commissioners for Revenue and Customs under the powers to make regulations conferred by section 169(1D) and (1E) of FA 2004 (as amended by this Schedule).
The Registered Pension Schemes (Provision of Information) Regulations 2006 (S.I. 2006/567) are amended as follows.
In the table in regulation 3(1), omit the entry for reportable event 21 (reporting that section 165(3A) or 167(2A) of FA 2004 applies).
Omit regulation 5B (reports for the tax year 2011-12).
In regulation 16(1) (information for insurance company provided with funds otherwise than from a drawdown pension fund) after “drawdown pension fund” insert “ or flexi-access drawdown fund ”.
In regulation 17(1) (information for insurance company provided with funds from a drawdown pension fund) after “drawdown pension fund” insert “ or flexi-access drawdown fund ”.
In regulation 17(2) and (4) after “of the member's drawdown pension fund” insert “ or of the member's flexi-access drawdown fund ”.
The amendments made by sub-paragraphs (4) to (6) are to be treated as having been made by the Commissioners for Her Majesty's Revenue and Customs under such of the powers cited in the instrument containing the Regulations as are applicable.
In consequence of sub-paragraph (2), omit regulation 4(9) of the Registered Pension Schemes (Provision of Information) (Amendment) (No. 2) Regulations 2011 (S.I. 2011/1797).
In consequence of sub-paragraph (3), omit regulation 5 of those 2011 Regulations.
The amendments made by sub-paragraphs (2) and (8) have effect in relation to reports for the tax year 2015-16 and subsequent tax years.
The amendments made by sub-paragraphs (3) and (9) come into force on 6 April 2015 but without prejudice to the continued operation of the revoked provisions in relation to reports for the tax year 2011-12.
The amendments made by sub-paragraphs (4) to (6) come into force on 6 April 2015.
Annuities
Reduction of restrictions on new annuities
Schedule 28 to FA 2004 (registered pension schemes) is amended as follows.
In paragraph 3 (definition of member's lifetime annuity) after sub-paragraph (1) insert—
In paragraph 6 (definition of member's short-term annuity) after sub-paragraph (1) insert—
In paragraph 17 (definition of dependants' annuity) after sub-paragraph (1) insert—
In paragraph 20 (definition of dependants' short-term annuity) after sub-paragraph (1) insert—
Further annuities amendments
In section 165(1) of FA 2004 (the pension rules) in pension rule 2 (death of a member)—
in the first sentence after “an annuity,” insert “ and if in the case of an annuity that day was before 6 April 2015, ”,
after that sentence insert—, and
in the final sentence for “But no other” substitute “ Except as provided by the preceding provisions of this rule, no ”.
Schedule 28 to FA 2004 (registered pension schemes) is further amended as follows.
In paragraph 3(1) (definition of member's lifetime annuity) after paragraph (b) insert—.
In paragraph 3(2C) (regulations for cases where lifetime annuity ceases and funds are transferred)—
before paragraph (a) insert—, and
in paragraph (b) for “any other case” substitute “ a case other than one where a new lifetime annuity becomes payable ”.
In paragraph 3 after sub-paragraph (2D) insert—
In paragraph 6(1) (definition of member's short-term annuity) after paragraph (c) insert—.
In paragraph 6(1C) (regulations for cases where short-term annuity ceases and funds are transferred)—
before paragraph (a) insert—, and
in paragraph (b) for “any other case” substitute “ a case other than one where a new short-term annuity becomes payable ”.
In paragraph 6 after sub-paragraph (1D) insert—
In paragraph 17(1) (definition of dependants' annuity) for paragraph (za) substitute—.
In paragraph 17(1A) for “sub-paragraph (1)(za)” substitute “ sub-paragraphs (1)(za) and (1ZA)(a) ”.
In paragraph 17(4) (regulations for cases where dependants' annuity ceases and funds are transferred)—
before paragraph (a) insert—, and
in paragraph (b) for “any other case” substitute “a case other than one where a new dependants' annuity becomes payable”.
In paragraph 17 after sub-paragraph (5) insert—
In paragraph 20(1) (definition of dependants' short-term annuity) after paragraph (c) insert—.
In paragraph 20(1C) (regulations for cases where dependants' short-term annuity ceases and funds are transferred)—
before paragraph (a) insert—, and
in paragraph (b) for “any other case” substitute “a case other than one where a new dependants' short-term annuity becomes payable”.
In paragraph 20 after sub-paragraph (1D) insert—
Consequential amendment
In Schedule 16 to FA 2011 (benefits under pension schemes) in each of paragraphs 87 and 95 (entitlement to unsecured or alternatively secured pension on 5 April 2011) for “the reference” substitute “ a reference ”.
Pension payments out of uncrystallised funds
Definitions etc
Part 4 of FA 2004 is amended as follows.
In section 166(1) (lump sums which may be paid by registered pension scheme) in the lump sum rule after paragraph (b) insert—.
In section 166(2) (when a person becomes entitled to a lump sum under a registered pension scheme) before the “ and ” at the end of paragraph (a) insert—.
In section 280(2) (index of defined expressions) after the entry for “uncrystallised funds lump sum death benefit” insert—
In Schedule 29 (supplementary provision about authorised lump sums) after paragraph 4 insert—
In paragraph 12(2)(b) of Schedule 29 (conditions for treating the whole of the lump sum as paid when all or part of the member's lifetime allowance is available) after “4(1),” insert “ 4A(1), ”.
In paragraph 12(4) of Schedule 29 (exceptions to treating the whole of the lump sum as paid when all or part of the member's lifetime allowance is available) before the “and” at the end of paragraph (a) insert—.
In paragraph 12(5) of Schedule 29 (when an excess can be an authorised lump sum) after “1(2),” insert “ 4A(2), ”.
In paragraph 15 of Schedule 32 (benefit crystallisation event 6: meaning of “relevant lump sum”) before the “or” at the end of paragraph (b) insert—.
Related amendments in Part 9 of ITEPA 2003
Section 636A of ITEPA 2003 (taxation of pension lump sums) is amended as follows.
After subsection (1) insert—
In subsection (2) (subsection (1) does not limit operation of lifetime allowance charge) for “subsection (1) does” substitute “ subsections (1) to (1B) do ”.
In subsection (6) (definitions) after “ “serious ill health lump sum”,” insert—.
Annual allowances
Basic structure of the annual allowance charge
Section 227 of FA 2004 (pensions under registered pension schemes: annual allowance charge) is amended as follows.
In subsection (1) (imposition of the charge) for the words from “where” to the end substitute “ where an individual who is a member of one or more registered pension schemes has a chargeable amount for a tax year. ”
After subsection (1) insert—
In subsection (4) (basic calculation of charge) for the words in the first sentence after “in respect of” substitute “ the chargeable amount. ”
In subsection (4A) (the appropriate rate) for “excess” (in each place) substitute “ chargeable amount ”.
In subsection (5) (excess is not income) for “That excess” substitute “ The chargeable amount ”.
In subsection (6) (further provision)—
before the entry for section 228 insert—,
in the entry for section 229, for “229” substitute “ 229(1) ”, and
after that entry insert— “ section 229(2) to (4) (how to arrive at the pension input amount in respect of an arrangement), ”.
The amendments made by this paragraph have effect for the tax year 2015-16 and subsequent tax years.
In FA 2004 after section 227 insert—
The amendment made by this paragraph has effect for the tax year 2015-16 and subsequent tax years.
Annual allowance charge where rights have been flexibly accessed
In FA 2004 before section 228 insert—
The amendment made by sub-paragraph (1) has effect for the tax year 2015-16 and subsequent tax years.
Further amendments
Omit section 227A of FA 2004 (annual allowance charge: individuals who met flexible drawdown conditions).
In consequence of sub-paragraph (1)—
in section 227(4) of FA 2004, omit the second sentence, and
omit paragraph 45 of Schedule 16 to FA 2011.
The amendments made by sub-paragraphs (1) and (2) have effect for the tax year 2015-16 and subsequent tax years.
In section 228A of FA 2004 (carry forward of unused annual allowance) after subsection (7) insert—
The amendment made by this paragraph has effect where the current tax year is the tax year 2015-16 or a subsequent tax year.
In section 237B of FA 2004 (scheme administrator's co-liability for individual's annual allowance charge) after subsection (2) insert—
In article 25C of the Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572) after paragraph (3) insert—
The amendment made by sub-paragraph (1) is to be treated as having been made by the Treasury under the powers to make orders conferred by section 283(2) of FA 2004.
Miscellaneous amendments
Pension commencement lump sums
In paragraph 3A(3) of Schedule 29 to FA 2004 (pension commencement lump sum: when pension scheme is to be treated as making an unauthorised payment) for the words “1% of the standard lifetime allowance on that day” substitute “ £7,500 ”.
The amendment made by sub-paragraph (1) has effect in relation to pension commencement lump sums paid on or after 6 April 2015.
Trivial commutation lump sums and small pot lump sums
In paragraph 7(1) of Schedule 29 to FA 2004 (meaning of “trivial commutation lump sum”)—
after paragraph (a) insert—,
in paragraph (d) (entitlement to benefits must be extinguished) for “the member's entitlement to benefits” substitute “ any entitlement to defined benefits that the member has ”, and
in paragraph (e) (member must have reached 60) for “the age of 60” substitute “ normal minimum pension age (or the ill-health condition is met) ”.
The amendments made by sub-paragraph (1) have effect for commutation periods beginning on or after 6 April 2015 and do so irrespective of whether the nominated date is before, on or after 6 April 2015.
In article 23C(4) of the Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572) (modifications of Schedule 29 to FA 2004) in the inserted paragraph 7A(1)(b) (member must have reached age 60 for certain sums to be trivial commutation lump sums) for “the age of 60” substitute “ normal minimum pension age (or the ill-health condition is met) ”.
The amendment made by sub-paragraph (1)—
has effect for determining whether a lump sum paid on or after 6 April 2015 is within the inserted paragraph 7A, and
is to be treated as having been made by the Treasury under the powers to make orders conferred by section 283(2) of FA 2004.
The Registered Pension Schemes (Authorised Payments) Regulations 2009 (S.I. 2009/1171) are amended as follows.
For regulation 10 substitute—
In each of regulations 11(1)(a), 11A(1)(a) and 12(1)(c) (member must have reached 60 for certain payments by registered pension scheme to be authorised payments) for “the age of 60” substitute “ normal minimum pension age or the ill-health condition is met (see paragraph 1 of Schedule 28) ”.
The amendments made by sub-paragraphs (2) and (3)—
have effect for payments made on or after 6 April 2015, and
are to be treated as having been made by the Commissioners for Her Majesty's Revenue and Customs under the powers to make regulations conferred by section 164(1)(f) and (2) of FA 2004.
Trivial commutation lump sum death benefits
Paragraph 20 of Schedule 29 to FA 2004 (trivial commutation lump sum death benefit) is amended as follows.
In sub-paragraph (1) (definition) for the words from “if” to the end substitute “ if condition A or B is met. ”
After sub-paragraph (1) insert—
In sub-paragraph (2) (excess over £18,000 not a trivial commutation lump sum death benefit) for “£18,000” substitute “ £30,000 ”.
In consequence of sub-paragraph (4), in Schedule 18 to FA 2011 omit paragraph 6(2).
The amendments made by this paragraph have effect in relation to lump sum death benefits paid on or after 6 April 2015.
Winding-up lump sum death benefit
In Schedule 29 to FA 2004 (authorised lump sums) omit paragraph 21 (which has come to have the effect that every winding-up lump sum death benefit is also a trivial commutation lump sum death benefit).
In consequence of sub-paragraph (1), in Schedule 18 to FA 2011 omit paragraph 7.
Early lifetime annuities
In paragraph 7 of Schedule 32 to FA 2004 (benefit crystallisation events 2 and 4: early lifetime annuities) after sub-paragraph (3) insert—
The amendment made by sub-paragraph (1) has effect in relation to a lifetime annuity if, applying the rule in section 165(3)(b) of FA 2004, the annuity is one to which an individual becomes entitled on or after 6 April 2015.
Individuals who on 5 April 2006 had actual right to payment of pensions
In paragraph 20(4)(a) and (b) of Schedule 36 to FA 2004 (lifetime allowance: deemed crystallisation: value of rights to pre-5 April 2006 drawdown pensions) before “the maximum” insert “ 80% of ”.
The amendment made by sub-paragraph (1) in relation to paragraph 20(4)(a) of that Schedule has effect where the benefit crystallisation event mentioned in the opening words of paragraph 20(2) of that Schedule occurs on or after 6 April 2015.
The amendment made by sub-paragraph (1) in relation to paragraph 20(4)(b) of that Schedule has effect where—
the benefit crystallisation event mentioned in the opening words of paragraph 20(2) of that Schedule occurs on or after 6 April 2015, and
section 165(3A) of FA 2004 first applied to the arrangement concerned in a drawdown pension year that began on or after 27 March 2014.
Transfers between schemes of funds held in respect of individual who has protected pension age
In Schedule 36 to FA 2004 after paragraph 23 insert—
The amendment made by sub-paragraph (1) has effect in relation to recognised transfers made on or after 6 April 2015.
Power to make certain payments
In FA 2004 after section 273A insert—
Temporary non-residence
ITEPA 2003 is amended as follows.
Section 579CA as substituted by paragraph 117 of Schedule 45 to FA 2013 (pensions under registered pension schemes: temporary non-residents) is amended as follows.
In subsection (2) (relevant withdrawals treated as accruing in the year of return from temporary non-residence) at the end insert.
For subsection (4) (meaning of “relevant withdrawal”) substitute—
In subsection (7) for the definition of “flexible drawdown arrangement” substitute—
The amendments made by this paragraph come into force on 6 April 2015.
The version of section 579CA which has effect if the year of departure is the tax year 2012-13 or an earlier tax year (pensions under registered pension schemes: temporary non-residents) is amended as follows.
In subsection (1)—
for “income withdrawal or dependants' income withdrawal under the registered pension scheme” substitute “ relevant withdrawal paid to a person ”,
omit paragraph (a), and
at the end insert “ , but only if the total amount of the relevant withdrawals meeting those conditions, and the relevant withdrawals (as defined by section 576A(4A)) meeting the conditions in section 576A(1) for the same set of years of non-residence, exceeds £100,000 ”.
After subsection (3) insert—
In subsection (4) for “income withdrawal or dependants' income” substitute “ relevant ”.
In subsection (5) for the definition of “flexible drawdown arrangement” substitute—
The amendments made by this paragraph come into force on 6 April 2015.
Section 576A as substituted by paragraph 116 of Schedule 45 to FA 2013 (pensions under relevant non-UK schemes: temporary non-residents) is amended as follows.
In subsection (2) (relevant withdrawals treated as accruing in the year of return from temporary non-residence) at the end insert.
For subsection (4) (meaning of “relevant withdrawal”) substitute—
In subsection (9)—
for the definition of “flexible drawdown arrangement” substitute—, and
after the definition of “remitted to the United Kingdom” insert—.
The amendments made by this paragraph come into force on 6 April 2015.
The version of section 576A which has effect if the year of departure is the tax year 2012-13 or an earlier tax year (pensions under relevant non-UK schemes: temporary non-residents) is amended as follows.
In subsection (1)—
for “non-UK income withdrawal under a relevant non-UK scheme” substitute “ withdrawal paid to a person ”,
omit paragraph (a), and
at the end insert “ , but only if the total amount of the relevant withdrawals meeting those conditions, and the relevant withdrawals (as defined by section 579CA(3A)) meeting the conditions in section 579CA(1) for the same set of years of non-residence, exceeds £100,000 ”.
In subsection (4) for “non-UK income withdrawal falling within subsection (1)” substitute “ withdrawal that meets the conditions in subsection (1)(b) and (c) ”.
After subsection (4) insert—
In each of subsections (5) to (7) omit “non-UK income”.
In subsection (8)—
for the definition of “flexible drawdown arrangement” substitute—,
omit the definition of “relevant non-UK income withdrawal”, and
before the definition of “year of non-residence” insert—.
The amendments made by this paragraph come into force on 6 April 2015.
Regulations about the effects of certain authorised payments
In section 164 of FA 2004 (authorised payments) after subsection (2) insert—
Provision of information
The Registered Pension Schemes (Provision of Information) Regulations 2006 (S.I. 2006/567) are amended as follows.
After regulation 14 insert—
Regulation 14A (annual allowance: annual provision of information by scheme administrator to member) is amended as follows.
In paragraph (1) (duty to provide annual pension savings statement)—
in paragraph (b) at the beginning insert,
in paragraph (b) at the end insert, and
after “containing the information” insert “ specified in paragraph (10) if the condition in sub-paragraph (b)(ii) is met but otherwise containing the information ”.
In the first sentence of paragraph (8) for “(1)” substitute “ (1)(a) ”.
After paragraph (8) insert—
In regulation 14B(1) (information mentioned in regulation 14A to be supplied by scheme administrator at member's request where no automatic duty to supply it) for “regulations 14A(2) or (7)” substitute “ regulation 14A(2), (7) or (10) ”.
The table in regulation 3(1) (provision of event reports by scheme administrators to HM Revenue and Customs) is amended as follows.
In column 1 of the entry for reportable event 22 (report where scheme administrator provides pension savings statement under regulation 14A(1)) after “14A(1)” insert “ containing the information specified in regulation 14A(2) ”.
After the entry for reportable event 22 insert—
The amendments made by this Part of the Schedule—
come into force on 6 April 2015, and
are to be treated as having been made by the Commissioners for Her Majesty's Revenue and Customs under such of the powers cited in the instrument containing the Regulations as are applicable.
Overseas pensions
In section 169(4) of FA 2004 (regulations about the provision of information by scheme managers of schemes that are or have been qualifying recognised overseas pension schemes) before the “and” at the end of paragraph (b) insert—.
Section 251 of FA 2004 (regulations about the provision of information) is amended as follows.
In subsection (4)—
omit the “or” at the end of paragraph (a), and
after paragraph (b) insert—
In subsection (6) at the end insert “ ; and “relevant non-UK scheme” has the meaning given by paragraph 1 of Schedule 34 ”.
In paragraph 5 of Schedule 33 to FA 2004 (conditions for scheme to be qualifying overseas pension scheme include condition that manager has undertaken to comply with prescribed benefit crystallisation information requirements) after sub-paragraph (2) insert—
Schedule 34 to FA 2004 (application of certain tax charges to non-UK schemes) is amended as follows.
In paragraph 1(3) (list of “member payment charges”) before the “and” at the end of paragraph (d) insert—.
In paragraph 1(4)—
after “The “member payment provisions” are” insert, and
at the end insert
After paragraph 5 insert—
In paragraph 6 (tax under member payment charges to be reduced by foreign tax in respect of the payment concerned)—
in sub-paragraph (1) after “in consequence of paragraph 1” insert “ , or by virtue of the operation of Chapter 4 of Part 9 of ITEPA 2003 in consequence of paragraph 5A, ”, and
in sub-paragraph (2) after “in consequence of paragraph 1” insert “ or 5A ”.
In paragraph 7(2) (regulations modifying the application, in relation to relevant non-UK schemes, of the member payment provisions) after paragraph (b) insert—.
After paragraph 9 insert—
In paragraph 11 (calculating pension input amounts for certain non-UK money purchase arrangements) after sub-paragraph (2) insert—
In paragraphs 12(2) and 19(2) (regulations modifying the application, in relation to relevant non-UK schemes, of the annual allowance provisions and lifetime allowance provisions) before the “and” at the end of paragraph (b) insert—.
The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (S.I. 2006/207) are amended as follows.
In regulation 5 (Part 4 of FA 2004 is modified in accordance with Part 3 of the Regulations) for “these Regulations” substitute “ this Part ”.
Regulation 15 (modifications of Schedule 29 to FA 2004 in its application to relevant non-UK schemes) is amended in accordance with sub-paragraphs (4) to (14).
In paragraph (2), in the inserted paragraph 1(4B), before the “and” at the end of paragraph (a) insert—.
In paragraph (2), in the inserted paragraph 1(4C), before the “and” at the end of paragraph (a) insert—.
In paragraph (3)(a), in the inserted definition of “RP”, after “any previous pension commencement lump sum” insert “ or previous uncrystallised funds pension lump sum ”.
In paragraph (3)(b), in the inserted paragraph 2(7ZA), after “to a pension commencement lump sum,” insert “ or to an uncrystallised funds pension lump sum, ”.
In paragraph (4)(b), in the inserted paragraph 4(6), before the “and” at the end of paragraph (a) insert—.
In paragraph (4)(b), in the inserted paragraph 4(7), before the “and” at the end of paragraph (a) insert—.
After paragraph (4) insert—
In paragraph (6), in the inserted paragraph 7(7), before the “and” at the end of paragraph (a) insert—.
In paragraph (6), in the inserted paragraph 7(8), before the “and” at the end of paragraph (a) insert—.
In paragraph (7), in the inserted paragraph 10(5), before the “and” at the end of paragraph (a) insert—.
In paragraph (7), in the inserted paragraph 10(6), before the “and” at the end of paragraph (a) insert—.
After Part 3 insert—
The amendments made by this paragraph—
have effect in relation to lump sums paid on or after 6 April 2015, and
are to be treated as having been made by the Commissioners for Her Majesty's Revenue and Customs under such of the powers conferred on them by Schedule 34 to FA 2004 (as amended by this Schedule) as are applicable.
In this paragraph—“the 2013 Regulations” means the Registered Pension Schemes and Overseas Pension Schemes (Miscellaneous Amendments) Regulations 2013 (S.I. 2013/2259), and“the 2006 Regulations” means the Pension Schemes (Information Requirements for Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pension Schemes and Corresponding Relief) Regulations 2006 (S.I. 2006/208).
In regulation 3 of the 2013 Regulations (paragraph 3(1A) of the 2006 Regulations has effect in relation to 5-year periods ending on or after 1 April 2015) for “1st April 2015” substitute “ 6 April 2016 ”.
In regulation 3(1C)(a) of the 2006 Regulations (transitional modification of the time limit in regulation 3(1A)) for “1st April 2010” substitute “ 6 April 2011 ”.
Death of pension scheme member
Death benefits: nominees and successors
Drawdown benefits for nominees and successors of deceased scheme members
FA 2004 is amended as follows.
Section 167 (the pension death benefit rules) is amended as follows.
In pension death benefit rule 1 (pension death benefit may be paid only to dependant of deceased member) after “dependant” insert “ , or nominee or successor, ”.
After pension death benefit rule 3 (pension death benefits which may be paid under a money purchase arrangement to a dependant) insert—
After subsection (1) insert—
In subsection (2) (meaning of “pension death benefit”) after “see section 165)” insert “ , or a pension payable in respect of the member on the subsequent death of a dependant, nominee or successor of the member ”.
In Part 2 of Schedule 28 (interpretation of the pension death benefit rules) at the end insert—
The provisions inserted by sub-paragraph (1) have effect even in relation to cases where the member concerned, or any dependant concerned, dies before 6 April 2015.
Nominees and successors: further drawdown amendments
In section 169(1D) (regulations about transfers of drawdown funds) after paragraph (aa) (which is inserted by this Act) insert.
In section 172(1)(a) (assignment of rights or benefits) after “dependant” insert “ , nominee or successor ”.
In section 172A(1)(a) (surrender of rights or benefits) after “dependant” insert “ , nominee or successor ”.
In section 172A(5) (exceptions to provisions on surrender: entitlement to benefits)—
in paragraph (b) after “dependant” insert “ , or nominee, ”,
after paragraph (b) insert—, and
in paragraph (c) for “or dependant” substitute “ , dependant, nominee or successor ”.
In section 172A(5A) (further provision on surrender exceptions)—
after “dependant”, in the first place it occurs, insert “ , or nominee, ”, and
after “dependant”, in the second place it occurs, insert “ or nominee ”.
In section 172A after subsection (5A) insert—
In section 172A(7) (exceptions to provisions on surrender: prospective entitlements)—
in the opening words after “dependant” insert “ or nominee or successor ”, and
in paragraph (a) after “dependant” insert “ , or nominee or successor, ”.
In section 172B(2) (rights of a “relevant member”)—
in paragraph (a) after “dependant” insert “ or nominee or successor ”, and
after paragraph (aa) insert—.
In section 172B(7A) (section does not apply to certain increases in rights) before “dependant's drawdown pension fund” (in both places) insert “ nominee's flexi-access drawdown fund, successor's flexi-access drawdown fund, ”.
In section 182(3) (value of arrangement for purposes of borrowing limits) after paragraph (b) insert—.
In section 280(2) (index of defined expressions) at the appropriate places insert—
Nomination of charities by nominees and successors of deceased scheme members
Paragraph 18 of Schedule 29 (charity lump sum death benefit) is amended as follows.
After sub-paragraph (2) insert—
In sub-paragraph (3) (cases where lump sum exceeds the permitted maximum) for “or (2)” substitute “ , (2) or (2A) ”.
In sub-paragraph (4) (meaning of “permitted maximum”) after “arrangement” insert “ , or the nominee's or successor's flexi-access drawdown fund in respect of the arrangement, ”.
Related amendments in regulations
Regulation 12 of the Registered Pension Schemes (Transfer of Sums and Assets) Regulations 2006 (S.I. 2006/499) (drawdown funds—recognised transfers) is amended as follows.
In the heading before “—recognised” insert “ and nominee's flexi-access drawdown fund and successor's flexi-access drawdown fund ”.
In paragraph (1) (transfer recognised only if transferred items are only items held under arrangement to which transfer made) before “member's drawdown pension fund” insert “ nominee's flexi-access drawdown fund, successor's flexi-access drawdown fund, ”.
The amendments made by this paragraph—
come into force on 6 April 2015, and
are to be treated as having been made by the Commissioners for Her Majesty's Revenue and Customs under the powers to make regulations conferred by section 169(1D) and (1E) of FA 2004 (as amended by this Schedule).
Lump sum death benefits
Special lump sum death benefits charge
Section 206 of FA 2004 (special lump sum death benefits charge) is amended as follows.
After subsection (1) insert—
After subsection (1A) insert—
For subsection (7) (lump sum death benefits which are not to be treated as income for tax purposes) substitute—
In consequence of sub-paragraph (4) omit paragraph 41(5) of Schedule 16 to FA 2011.
In section 280(2) of FA 2004 (index of defined expressions) in the entry for “special lump sum death benefits charge” for “206(1)” substitute “ 206 ”.
Uncrystallised funds lump sum death benefit
In paragraph 15 of Schedule 29 to FA 2004 (uncrystallised funds lump sum death benefit)—
in sub-paragraph (1) omit the second sentence (lump sum is uncrystallised funds lump sum death benefit only if paid before end of relevant two-year period), and
omit sub-paragraph (1A) (meaning of “relevant two-year period” in the second sentence of sub-paragraph (1)).
In paragraph 16 of Schedule 32 to FA 2004 (benefit crystallisation event 7: uncrystallised funds lump sum death benefit is a “relevant lump sum death benefit”)—
in sub-paragraph (b) after “benefit” insert, and
after sub-paragraph (b) insert—
In section 636A of ITEPA 2003 (exemption for certain lump sums under registered pension schemes)—
in subsection (1) (lump sums on which there is no liability to income tax)—
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
omit paragraph (e) and the “or” preceding it (uncrystallised funds lump sum death benefit paid in respect of member who dies under 75), and
in subsection (4)(aa) (on uncrystallised funds lump sum death benefit paid in respect of member who dies having reached 75 there is no liability to income tax other than liability under section 206 of FA 2004) omit “paid in respect of a member who had reached the age of 75 at the date of the member's death”.
In consequence of sub-paragraphs (1) and (3) omit—
paragraphs 35(2)(c) and (3) and 42(2)(c) of Schedule 16 to FA 2011, and
paragraph 28(2)(a) of Schedule 19 to FA 2007.
Commencement
The amendments made by paragraphs 17 and 19 apply to lump sums paid on or after 6 April 2015, and the amendment made by paragraph 18 comes into force on that day.
Uncrystallised rights at member's death
In section 216(1) of FA 2004 (benefit crystallisation events and amounts crystallised), in the table, after the entry relating to benefit crystallisation event 5B insert—
Section 217 of FA 2004 (persons liable to lifetime allowance charge) is amended as follows.
After subsection (1) insert—
In subsection (2) for “But where” substitute “ Where ”.
After subsection (2) insert—
For subsections (3) and (4) (multiple relevant lump sum death benefits) substitute—
The amendment made by sub-paragraph (5) comes into force on 6 April 2015.
Section 219 of FA 2004 (availability of individual's lifetime allowance) is amended as follows.
In subsection (7) (cases where there is more than one benefit crystallisation event 7)—
after “more than one” insert “ relevant post-death ”,
omit “by reason of the payment of lump sum death benefits”, and
for “individual the” substitute “ individual, the relevant post-death ”.
After subsection (7) insert—
The amendments made by this paragraph come into force on 6 April 2015.
Schedule 32 to FA 2004 (supplementary provisions about benefit crystallisation events) is amended as follows.
In paragraph 1 (meaning of “the relevant pension schemes”: in certain cases means schemes of which the individual was a member immediately before death) before “7” insert “ 5C or ”.
After paragraph 14A insert—
Income tax on beneficiaries' income withdrawal
ITEPA 2003 is amended as follows.
In section 573 (foreign pensions to which section 573 applies) after subsection (2) insert—
In section 574(1) (foreign pensions: meaning of “pension”)—
in paragraph (b) (“pension” includes amounts corresponding to income withdrawal or dependants' income withdrawal)—
omit “or dependants' income withdrawal”, and
for “paragraphs 7 and 21” substitute “ paragraph 7 ”, and
before the “and” at the end of paragraph (b) insert—.
In section 579A(1) (section applies to pensions under registered pension schemes, subject to subsection (2)) after “subsection (2)” insert “ and section 579CZA ”.
After section 579C insert—
In section 579D (interpretation of sections 579A to 579D)—
at the appropriate places insert—, and, and
in paragraph (b) of the definition of “pension under a registered pension scheme” after “dependants' income withdrawal” insert “, or nominees' income withdrawal or successors' income withdrawal,”.
The amendments made by sub-paragraphs (2) to (5) have effect in relation to pension paid on or after 6 April 2015.