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Income Tax (Earnings and Pensions) Act 2003

Type Public General Act

Publication 2003-03-06

Last updated 2026-03-15

State In force

Department Statute Law Database

Source legislation.gov.uk

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(10) In subsections (1)(b), (5), (6), (7) and (9) references to an employee include a former employee, so, when applying those subsections in relation to a former employee, any reference to remuneration, length of service, hours worked, being employed in a particular part of a business or carrying on particular activities is to be read as relating to that former employment.

312D

(1) For the purposes of section 312B, a company meets the trading requirement if—

(a) it is a trading company which is not a member of a group, or

(b) it is a member of a trading group.

(2) “Trading company” means a company carrying on trading activities whose activities do not include to a substantial extent activities other than trading activities.

(3) “Trading group” means a group—

(a) one or more of whose members carry on trading group activities, and

(b) the activities of whose members, taken together, do not include to a substantial extent activities other than trading group activities.

(4) In this section—

“trading activities” means activities carried on by the company in the course of, or for the purposes of, a trade being carried on by it;

“trading group activities” means activities carried on by a member of the group in the course of, or for the purposes of, a trade being carried on by any member of the group.

(5) For the purposes of determining whether a company is a trading company or a member of a trading group—

(a) the activities of the members of a group are to be treated as one business (with the result that activities are disregarded to the extent that they are intra-group activities), and

(b) a business carried on by a company in partnership with one or more other persons is to be treated as not being a trading activity.

312E

(1) For the purposes of section 312B, a company meets the indirect employee-ownership requirement if—

(a) a settlement meets the controlling interest requirement in respect of—

(i) the company, or

(ii) if the company is a member of a trading group, but not the principal company, that principal company, and

(b) the settlement meets the all-employee benefit requirement.

(2) For this purpose—

(a) section 236M of TCGA 1992 applies to determine if a settlement meets the controlling interest requirement in respect of the company mentioned in subsection (1)(a)(i) or (ii) (as the case may be), and

(b) sections 236J and 236K of that Act apply to determine if the settlement meets the all-employee benefit requirement (but see subsection (3)).

(3) If a settlement would not otherwise meet the all-employee benefit requirement at any time during the qualifying period, section 236L of TCGA 1992 applies for the purposes of subsection (1)(b), unless the all-employee benefit requirement has (ignoring that section) previously been met at any time in the period—

(a) beginning with 10 December 2013, and

(b) ending immediately before that time.

(4) For the purposes of subsections (2) and (3)—

(a) in sections 236I to 236M of TCGA 1992 references to C are to be read as references to the company in respect of which the settlement is required to meet the controlling interest requirement (see subsection (1)(a)), and

(b) section 236L of that Act applies as if the reference in subsection (1)(c) of that section to the period of 12 months ending with the time in question were a reference to the period of 12 months ending with the date the payment is made (even if the qualifying period is a period of less than 12 months by virtue of section 312B(3)).

312F

(1) For the purposes of section 312B, a company meets the officer-holder requirement if the appropriate fraction does not exceed 2/5.

(2) “The appropriate fraction” means—

$$ND NE$where—ND is the number of persons who are one or both of the following—a director or other office-holder of the company;an employee of the company connected with a person within paragraph (a);NE is the number of persons who are employees (or office-holders) of the company.$

312G

(1) For the purposes of section 312B, “service company” means—

(a) a managed service company within the meaning of section 61B, or

(b) a company (“SC”) in respect of which Conditions A and B are met.

(2) Condition A is that the business carried on by SC consists substantially of the provision of the services of persons employed by it.

(3) Condition B is that the majority of those services are provided to persons—

(a) to whom subsection (4) applies, but

(b) who are not members of the same group as the company which makes the payment.

(4) This subsection applies to—

(a) a person who controls or has controlled, or two or more persons who together control or have controlled, SC or any company of which SC is a 51% subsidiary at the time the payment is made,

(b) a person who, or two or more persons who together, at any time before the time the payment is made—

(i) employed all or a majority of the employees of SC, or

(ii) employed all or a majority of the employees of SC and other companies which are members of the same group as SC at the time the payment is made (taken together), and

(c) any company which is a 51% subsidiary of, controlled by or connected or associated with, any person within paragraph (a) or (b).

(5) For the purposes of subsection (4)—

(a) a partnership is to be treated as a single person, and

(b) where a partner (alone or together with others) has control of a company, the partnership is to be treated as having (in the same way) control of that company.

(6) The following provisions apply for the purposes of this section—

(a) section 449 of CTA 2010 (“associated company”);

(b) section 995 of ITA 2007 (meaning of “control”);

312H

(1) For the purposes of section 312B, a payment is “excluded” if the employee is a party to arrangements (whether made before or after the beginning of the employee's employment) under which—

(a) the employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of the payment, or

(b) the employee and employer agree that the employee is to receive the payment rather than receive some other description of employment income.

(2) In this section references to an employee include a former employee.

312I

(1) In this Chapter—

“company” has the meaning given by section 170(9) of TCGA 1992;

“trade” means any trade which is conducted on a commercial basis and with a view to the realisation of profits.

(2) In this Chapter—

(a) references to a group, to membership of a group, to the principal company of a group or to being members of the same group, are to be construed in accordance with section 170 of TCGA 1992, and

(b) references to a group are to be construed with any necessary modifications where applied to a company incorporated under the law of a country or territory outside the United Kingdom.

(3) For the purposes of this Chapter, a payment is treated as made when it would be treated as received for the purposes of Chapter 4 of Part 2 if it were not a qualifying bonus payment (see section 18).

(4) In this Chapter references to a payment to an employee or former employee include a payment to the personal representatives of an employee or former employee who has died if the payment is made within the period of 12 months beginning with the date of death.

430A

(1) This section applies if—

(a) an associated person disposes of the employment-related securities (“the old securities”) for consideration, otherwise than to another associated person,

(b) the whole or part of the consideration consists of, or includes, other securities which are restricted securities (“the new securities”) being acquired by an associated person,

(c) the value of the consideration determined in accordance with subsection (2) is no more than what would have been the market value of the old securities immediately before the disposal but for any restrictions, and

(d) the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of the disposal.

(2) The value of the consideration is the sum of—

(a) what would have been the market value of the new securities immediately before the disposal but for any restrictions, and

(b) the value of the rest of the consideration (if any).

(3) If the consideration consists partly of the new securities and partly of other consideration, the disposal is to be treated for the purposes of this Chapter as being two separate disposals as follows—

(a) a disposal, that is a chargeable event within section 427(3)(c), of the appropriate amount of the old securities (see subsection (4)) for such of the consideration as does not consist of the new securities, and

(b) a disposal, to which this section applies, of the remaining old securities for consideration consisting wholly of the new securities.

(4) In subsection (3)(a) the appropriate amount of the old securities is—

$$OS × OC TC$where— OS is the total number of the old securities,OC is the value of such of the consideration as does not consist of the new securities, andTC is value of the consideration determined in accordance with subsection (2).$

(5) If the consideration consists wholly of the new securities—

(a) neither the disposal of the old securities, nor the acquisition of the new securities, gives rise to any liability to income tax,

(b) the disposal is not a chargeable event within section 427(3)(c), and

(6) Sections 425 and 431 do not apply in relation to the new securities.

(7) If, at the time of the disposal, sections 426 to 429 do not apply to the old securities by virtue of—

(a) an election made under section 430(1) or 431(1) in relation to the old securities, or

(b) this subsection,

sections 426 to 430 do not apply to the new securities.

(8) If there is a chargeable event for the purposes of section 426 in relation to any of the new securities, for the purposes of section 428 (amount of charge)—

(a) IUP (see subsection (3) of that section) is to be determined in accordance with subsection (9), and

(b) PCP (see subsection (4) of that section) is to be determined in accordance with subsection (10).

(9) IUP is equal to what IUP was, for the purposes of determining the taxable amount for the purposes of section 426, in relation to chargeable events relating to the old securities that occurred before the disposal (or what it would have been had there been any such chargeable events).

(10) PCP is the aggregate of—

(a) PCP determined in accordance with section 428(4), and

(b) what PCP would have been, for the purposes of determining the taxable amount for the purposes of section 426, if a chargeable event relating to the old securities had occurred immediately before the disposal but after any chargeable events relating to the old securities that actually did occur before the disposal.

(11) Subsections (12) to (14) apply if—

(a) section 425(2) (no liability to income tax on acquisition of certain securities subject to forfeiture etc) applied in relation to the old securities, and

(b) at the time of the disposal, there is still a restriction relating to those securities such that they are restricted securities by virtue of section 423(2) (provision for forfeiture etc).

(12) This Chapter has effect in relation to any of the new securities that are not restricted securities by virtue of section 423(2) as if—

(a) there were a restriction relating to them (“the deemed restriction”) corresponding to the restriction relating to the old securities mentioned in subsection (11)(b), and

(b) immediately after their acquisition, the deemed restriction were removed.

(13) Subsection (14) applies if—

(a) there is a restriction by virtue of which some or all of the new securities are, at the time of the disposal, restricted securities, by virtue of subsection (2) of section 423, and

(b) within 5 years after the acquisition of the old securities, the restriction is not removed or varied such that the new securities to which it relates cease to be restricted securities by virtue of that subsection.

(14) For the purposes of this Chapter the restriction mentioned in subsection (13) is to be treated as being removed 5 years after the acquisition of the old securities.

(15) Subsection (16) applies if, at the time of the disposal—

(a) there is a restriction relating to the old securities such that they are restricted securities by virtue of section 423(2), and

(b) subsections (13) and (14) apply in relation to the old securities (including by virtue of subsection (16)).

(16) Subsections (12) to (14) apply in relation to the new securities, but—

(a) the reference in subsection (12)(a) to the restriction mentioned in subsection (11)(b) is to be read as a reference to the restriction mentioned in subsection (15)(a), and

(b) the references in subsections (13)(b) and (14) to the acquisition of the old securities are to be read as references to the acquisition of the original forfeitable securities.

(17) In subsection (16) “original forfeitable securities” means the restricted securities by virtue of the application to which of section 425(2) subsections (13) and (14) apply to the old securities.

(18) In this section references to restricted securities include a restricted interest in securities.

Interpretation: persons linked with A

Amount charged to tax

Employment intermediaries: information powers

716B

(1) For purposes connected with Chapter 7 of Part 2 (treatment of workers supplied by agencies) or Part 11 (PAYE), the Commissioners for Her Majesty's Revenue and Customs may by regulations make provision for, or in connection with, requiring a specified employment intermediary—

(a) to keep and preserve specified information, records or documents for a specified period;

(b) to provide Her Majesty's Revenue and Customs with specified information, records or documents within a specified period or at specified times.

(2) An “employment intermediary” is a person who makes arrangements under or in consequence of which—

(a) an individual works, or is to work, for a third person, or

(b) an individual is, or is to be, remunerated for work done for a third person.

(3) For the purposes of subsection (2), an individual works for a person if—

(a) the individual performs any duties of an employment for that person (whether or not the individual is employed by that person), or

(b) the individual provides, or is involved in the provision of, a service to that person.

(4) In subsection (1) “specified” means specified or described in regulations made under this section.

(5) Regulations under this section may—

(a) make different provision for different cases or different purposes, and

(b) make incidental, consequential, supplementary or transitional provision or savings.

Exemptions and liabilities for certain lump sums under registered pension schemes

Tax tables

Notice of scheme to be given to HMRC

Notices and returns to be given electronically etc

Annual returns

Appeals

Annual returns

Enquiries

Assessment of penalties

Annual returns

Notice of scheme to be given to HMRC

Appeals

Notices and returns to be given electronically etc

579CZA

(1) Section 579A does not apply to dependants' income withdrawal or nominees' income withdrawal if it is paid—

(a) in respect of a deceased member of a registered pension scheme who had not reached the age of 75 at the date of the member's death, and

(b) to a person from the person's—

(i) dependant's drawdown pension fund,

(ii) dependant's flexi-access drawdown fund, or

(iii) nominee's flexi-access drawdown fund,

in respect of a money purchase arrangement under a registered pension scheme.

(2) Section 579A does not apply to successors' income withdrawal if it is paid—

(a) in respect of a deceased beneficiary of a deceased member of a registered pension scheme where the beneficiary had not reached the age of 75 at the date of the beneficiary's death, and

(b) to a person from the person's successor's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme,

and here “beneficiary” means dependant, nominee or successor.

(3) Subsection (1) is subject to the following provisions of this section.

(4) Section 579A does apply to dependants' income withdrawal paid on or after 6 April 2015 to a person from the person's dependant's drawdown pension fund in respect of a money purchase arrangement under a registered pension scheme (“the drawdown fund”) if before 6 April 2015—

(a) any payment of dependants' income withdrawal was made from—

(i) the drawdown fund, or

(ii) any fund represented (to any extent) by the drawdown fund, or

(b) any payment was made of a dependants' short-term annuity purchased using sums or assets out of—

(i) the drawdown fund, or

(ii) any fund represented (to any extent) by the drawdown fund.

(5) Section 579A does apply to dependants' income withdrawal paid in respect of a deceased member of a registered pension scheme to a person from the person's dependant's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme (“the new fund”) if—

(a) any of the sums or assets that make up the new fund—

(i) became newly-designated dependant funds under paragraph 22A(2)(b) of Schedule 28 to FA 2004 or as a result of the operation of any of paragraphs 22B to 22D of that Schedule, or

(ii) arise, or (directly or indirectly) derive, from any such newly-designated dependant funds or from sums or assets which so arise or derive,

(b) before 6 April 2015—

(i) any payment of dependants' income withdrawal in respect of the deceased member was made to the person from, or

(ii) any payment in respect of the deceased member was made to the person of a dependants' short-term annuity purchased using sums or assets out of,

the person's dependant's drawdown pension fund in respect of a money purchase arrangement under a registered pension scheme, and

(c) any of the sums or assets that made up that fund at the time of that payment to any extent make up, or are represented by sums or assets that to any extent make up, the new fund.

(6) Where relevant unused uncrystallised funds—

(a) are designated on or after 6 April 2015 as available for the payment of dependants' drawdown pension or nominees' drawdown pension, and

(b) as a result of the designation make up (to any extent) a person's dependant's flexi-access drawdown fund or nominee's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme, but

section 579A does apply to dependants' income withdrawal or nominees' income withdrawal paid to the person from the fund so far as it is paid in respect of sums or assets for the time being representing the whole or any part of those relevant unused uncrystallised funds.

(7) In this section—

“dependant”, “nominee” and “successor” have the meaning given (respectively) by paragraphs 15, 27A and 27F of Schedule 28 to FA 2004,

“dependant's drawdown pension fund”, “dependant's flexi-access drawdown fund”, “nominee's flexi-access drawdown fund” and “successor's flexi-access drawdown fund” have the meaning given (respectively) by paragraphs 22, 22A, 27E and 27K of Schedule 28 to FA 2004,

“money purchase arrangement” has the meaning given by section 152 of FA 2004, and

“the relevant two-year period”, in relation to relevant unused uncrystallised funds held for the purposes of a money purchase arrangement relating to a deceased individual under a registered pension scheme, means the period of two years beginning with the earlier of the day on which the scheme administrator of the scheme first knew of the individual's death and the day on which the scheme administrator could first reasonably have been expected to have known of it.

(8) For the purposes of this section, sums or assets held after the death of a member of a registered pension scheme for the purposes of a money purchase arrangement relating to the member under the scheme are “relevant unused uncrystallised funds” if—

(a) they are unused uncrystallised funds, and

(b) the member had not reached the age of 75 at the date of the member's death.

(9) Paragraph 27E(4) and (5) of Schedule 28 to FA 2004 (meaning of “unused uncrystallised funds”) apply for the purposes of subsection (8)(a).

Recommended medical treatment

320C

(1) No liability to income tax arises in respect of—

(a) the provision to an employee of recommended medical treatment, or

(b) the payment or reimbursement, to or in respect of an employee, of the cost of such treatment,

if that provision, payment or reimbursement is not pursuant to relevant salary sacrifice arrangements or relevant flexible remuneration arrangements.

(2) But subsection (1) does not apply in a tax year if, and to the extent that, the value of the exemption in that year exceeds £500.

(3) Medical treatment is “recommended” if it is provided to the employee in accordance with a recommendation which—

(a) is made to the employee as part of occupational health services provided to the employee by a service provided—

(i) under section 2 of the Employment and Training Act 1973 (arrangements for the purpose of assisting persons to retain employment etc), or

(ii) by, or in accordance with arrangements made by, the employer,

(b) is made for the purpose of assisting the employee to return to work after a period of absence due to injury or ill health, and

(4) Regulations under subsection (3)(c) may, in particular, specify that the recommendation must be one given after the employee has been assessed as unfit for work—

(a) for at least the specified number of consecutive days, and

(b) in the specified manner by a person of a specified description.

(5) The Treasury may by order amend subsection (3)(a) so as to add, amend or remove a reference to any enactment.

(6) “The value of the exemption”, in a tax year, is an amount equal to the sum of—

(a) all earnings within section 62 (earnings), and

(b) all earnings which are treated as such under the benefits code,

in respect of which subsection (1) would prevent liability to income tax from arising in the tax year disregarding subsection (2).

(7) In this section—

“medical treatment” means all procedures for diagnosing or treating any physical or mental illness, infirmity or defect;

“relevant salary sacrifice arrangements” means arrangements (whenever made, whether before or after the employment began) under which the employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of recommended medical treatment or the payment or reimbursement of the cost of such treatment;

“relevant flexible remuneration arrangements” means arrangements (whenever made, whether before or after the employment began) under which the employee and employer agree that the employee is to be provided with recommended medical treatment or the cost of such treatment is to be paid or reimbursed, rather than the employee receiving some other description of employment income;

“specified” means specified in regulations under subsection (3)(c).

CHAPTER 7A — Exemptions: amounts which would otherwise be deductible

289A

(1) No liability to income tax arises by virtue of Chapter 3 of Part 3 (taxable benefits: expenses payments) in respect of an amount (“amount A”) paid or reimbursed by a person to an employee (whether or not an employee of the person) in respect of expenses if—

(a) an amount equal to or exceeding amount A would (ignoring this section) be allowed as a deduction from the employee's earnings under Chapter 2 or 5 of Part 5 in respect of the expenses, and

(b) the payment or reimbursement is not provided pursuant to relevant salary sacrifice arrangements.

(2) No liability to income tax arises in respect of an amount paid or reimbursed by a person (“the payer”) to an employee (whether or not an employee of the payer) in respect of expenses if—

(a) the amount has been calculated and paid or reimbursed in an approved way (see subsection (6)),

(b) the payment or reimbursement is not provided pursuant to relevant salary sacrifice arrangements, and

(2A) No liability to income tax arises in respect of an amount paid or reimbursed by a person (“the payer”) to an employee (whether or not an employee of the payer) for expenses in the course of qualifying travel if—

(a) the amount has been calculated and paid or reimbursed in accordance with regulations made by the Commissioners for Her Majesty's Revenue and Customs,

(b) the payment or reimbursement is not provided pursuant to relevant salary sacrifice arrangements, and

(3) Condition A is that the payer or another person operates a system for checking—

(a) that the employee is, or employees are, in fact incurring and paying amounts in respect of expenses of the same kind, and

(b) that a deduction would (ignoring this section) be allowed under Chapter 2 or 5 of Part 5 in respect of those amounts.

(4) Condition B is that neither the payer nor any other person operating the system knows or suspects, or could reasonably be expected to know or suspect—

(a) that the employee has not incurred and paid an amount in respect of the expenses, or

(b) that a deduction from the employee's earnings would not be allowed under Chapter 2 or 5 of Part 5 in respect of the amount.

(4A) Condition C is that—

(a) the payer or another person operates a system for checking that the employee has undertaken the qualifying travel in relation to which the amount is paid or reimbursed, and

(b) neither the payer nor any other person operating the system knows or suspects, or could reasonably be expected to know or suspect, that the travel was not undertaken.

(5) In this section “relevant” , in relation to an employee to whom an amount is paid or reimbursed for or in respect of expenses, means arrangements (whenever made, whether before or after the employment began) under which—

(a) the employee gives up the right to receive an amount of general earnings or specific employment income in return for the payment or reimbursement, or

(b) the amount of other general earnings or specific employment income received by the employee depends on the amount of the payment or reimbursement.

(5A) In this section “qualifying travel” means travel for which a deduction from the employee's earnings would be allowed under Chapter 2 or 5 of Part 5.

(6) For the purposes of subsection (2) , a sum is calculated and paid or reimbursed in an approved way if—

(a) it is calculated and paid or reimbursed in accordance with regulations made by the Commissioners for Her Majesty's Revenue and Customs, or

(b) it is calculated and paid or reimbursed in accordance with an approval given under section 289B.

(7) Regulations made under subsection (2A)(a) or (6)(a) may make different provision for different purposes.

(8) Regulations made under subsection (2A)(a) may contain provision about calculating amounts that is framed by reference to rates (for expenses) published from time to time by the Commissioners for Her Majesty's Revenue and Customs.

289B

(1) A person (“the applicant”) may apply to Her Majesty's Revenue and Customs for approval to pay or reimburse expenses of the applicant's employees, or employees of another person, at a rate set out in the application (“the proposed rate”).

(2) An officer of Revenue and Customs may give the approval if satisfied that any calculation of a payment or reimbursement of expenses in accordance with the proposed rate, or such other rate as is agreed between the applicant and the officer, would be a reasonable estimate of the amount of expenses actually incurred.

(3) An approval under subsection (2) takes effect in accordance with a notice (an “approval notice”) given to the applicant by an officer of Revenue and Customs.

(4) An approval notice must specify—

(a) the rate at which expenses may be paid or reimbursed,

(b) the day from which the approval takes effect, that day not being earlier than the day on which the approval notice is given,

(c) the day on which the approval ceases to have effect, that day not being later than the end of the period of 5 years beginning with the day on which the approval takes effect, and

(d) the type of expenses to which the approval relates.

(5) An approval notice may specify that the approval is subject to conditions specified or described in the notice.

(6) An application for an approval under this section must be in such form and manner, and contain such information, as is specified by Her Majesty's Revenue and Customs.

289C

(1) An officer of Revenue and Customs may, if in the officer's opinion there is reason to do so, revoke an approval given under section 289B by giving a further notice (a “revocation notice”) to either or both of the following—

(a) the person who applied for the approval, and

(b) the person who is paying or reimbursing expenses in accordance with the approval.

(2) A revocation notice may revoke the approval from—

(a) the day on which the approval took effect, or

(b) a later day specified in the notice.

(3) A revocation under subsection (1) may be in relation to all expenses or expenses of a description specified in the revocation notice.

(4) If the revocation notice revokes the approval from the day on which the approval took effect—

(a) any liability to tax that would have arisen in respect of the payment or reimbursement of expenses if the approval had never been given in relation to such expenses is to be treated as having arisen, and

(b) any person who has made, and any employee who has received, a payment or reimbursement of expenses calculated in accordance with the approval must make all the returns which they would have had to make if the approval had never been given in relation to such expenses.

(5) If the revocation notice revokes the approval from a later day—

(a) any liability to tax that would have arisen in respect of the payment or reimbursement of expenses if the approval had ceased to have effect on that day in relation to such expenses is to be treated as having arisen, and

(b) any person who has made, and any employee who has received, a payment or reimbursement of expenses calculated in accordance with the approval must make all the returns which they would have had to make if the approval had ceased to have effect in relation to such expenses on that day.

289D

(1) No liability to income tax arises by virtue of any provision of the benefits code in respect of an amount (“amount A”) treated as earnings of an employee as a result of the provision of a benefit if—

(a) an amount equal to amount A would (ignoring this section) be allowed as a deduction from the employee's earnings under Chapter 3 of Part 5 in respect of the provision of the benefit, and

(b) the benefit is not provided pursuant to relevant salary sacrifice arrangements.

(2) “Relevant salary sacrifice arrangements”, in relation to an employee to whom a benefit is provided, means arrangements (whenever made, whether before or after the employment began) under which—

(a) the employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of the benefit, or

(b) the amount of other general earnings or specific employment income received by the employee depends on the provision of the benefit.

289E

(1) This section applies if conditions A to C are met.

(2) Condition A is that, pursuant to arrangements, an amount—

(a) is paid or reimbursed to an employee in respect of expenses, or

(b) is treated as earnings of an employee as a result of the provision of a benefit,

which, in the absence of this section, would have been exempt from income tax.

(3) Condition B is that, in the absence of those arrangements, the employee would have received a greater amount of general earnings or specific employment income in respect of which—

(a) tax would have been chargeable, or

(b) national insurance contributions would have been payable (whether by the employee or another person).

(4) Condition C is that the main purpose, or one of the main purposes, of the arrangements is the avoidance of tax or national insurance contributions.

(5) If this section applies—

(a) the exemption conferred by section 289A does not apply in respect of the amount paid or reimbursed as mentioned in subsection (2)(a), and

(b) the exemption conferred by section 289D does not apply in respect of the amount treated as earnings as mentioned in subsection (2)(b).

(6) In this section “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable.

290C

(1) This section applies where a person is in employment which is lower-paid employment as a minister of religion in relation to a tax year.

(2) No liability to income tax arises in respect of the person in relation to the tax year by virtue of any of the following Chapters of the benefits code—

(a) Chapter 3 (taxable benefits: expenses payments);

(b) Chapter 6 (taxable benefits: cars, vans and related benefits);

(d) Chapter 10 (taxable benefits: residual liability to charge).

(3) Subsection (2)—

(a) means that in any of those Chapters a reference to an employee does not include an employee whose employment is within the exclusion in that subsection, if the context is such that the reference is to an employee in relation to whom the Chapter applies, but

(b) does not restrict the meaning of references to employees in other contexts.

(4) Subsection (2) has effect subject to—

(a) section 188(2) (discharge of loan: where employment becomes lower-paid), and

(b) section 290G (employment in two or more related employments).

290D

(1) For the purposes of this Part an employment is “lower-paid employment as a minister of religion” in relation to a tax year if—

(a) the employment is direct employment as a minister of a religious denomination, and

(b) the earnings rate for the employment for the year (calculated under section 290E) is less than £8,500.

(2) An employment is not “direct employment” for the purposes of subsection (1)(a) if—

(a) it is an employment which is treated as existing under—

(i) section 56(2) (deemed employment of worker by intermediary), or

(ii) section 61G(2) (deemed employment of worker by managed service company), or

(b) an amount counts as employment income in respect of it by virtue of section 554Z2(1) (treatment of relevant step under Part 7A (employment income provided through third parties)).

(3) Subsection (1) is subject to section 290G.

290E

(1) For any tax year the earnings rate for an employment is to be calculated as follows—

Step 1 Find the total of the following amounts—the total amount of the earnings from the employment for the year within Chapter 1 of Part 3 (earnings),the total of any amounts that are treated as earnings from the employment for the year under the benefits code (see subsections (2) and (3)), andthe total of any amounts that are treated as earnings from the employment for the year under Chapter 12 of Part 3 (other amounts treated as earnings),excluding any exempt income, other than any attributable to section 290A or 290B (accommodation outgoings of ministers of religion).

Step 2 Add to that total any extra amount required to be added for the year by section 290F (extra amounts to be added in connection with a car).

Step 3 Subtract the total amount of any authorised deductions (see subsection (4)) from the result of step 2.

Step 4 The earnings rate for the employment for the year is given by the formula—$R × Y E$where—R is the result of step 3,Y is the number of days in the year, andE is the number of days in the year when the employment is held.

(2) Section 290C(2) (provisions of benefits code not applicable to lower-paid ministers of religion) is to be disregarded for the purpose of determining any amount under step 1.

(3) If the benefit of living accommodation is to be taken into account under step 1, the cash equivalent is to be calculated in accordance with section 105 (even if the cost of providing the accommodation exceeds £75,000).

(4) For the purposes of step 3 “authorised deduction” means any deduction that would (assuming it was an amount of taxable earnings) be allowed from any amount within step 1 under—

section 346 (employee liabilities),

section 370 (travel costs and expenses where duties performed abroad: employee's travel),

section 371 (travel costs and expenses where duties performed abroad: visiting spouse's, civil partner's or child's travel),

section 373 (non-resident or qualifying new resident employee's travel costs and expenses where duties performed in UK),

section 374 (non-resident or qualifying new resident employee's spouse's, civil partner's or child's travel costs and expenses where duties performed in UK),

section 376 (foreign accommodation and subsistence costs and expenses (overseas employments)),

section 713 (payroll giving to charities),

sections 188 to 194 of FA 2004 (contributions to registered pension schemes), or

section 262 of CAA 2001 (capital allowances to be given effect by treating them as deductions).

290F

(1) The provisions of this section apply for the purposes of section 290E in the case of a tax year in which a car is made available as mentioned in section 114(1) (cars, vans and related benefits) by reason of the employment.

(2) Subsection (3) applies if in the tax year—

(a) an alternative to the benefit of the car is offered, and

(b) the amount that would be earnings within Chapter 1 of Part 3 if the benefit of the car were to be determined by reference to the alternative offered exceeds the benefit code earnings (see subsection (4)).

(3) The amount of the excess is an extra amount to be added under step 2 in section 290E(1).

(4) For the purposes of subsection (2) “the benefit code earnings” is the total for the year of—

(a) the cash equivalent of the benefit of the car (calculated in accordance with Chapter 6 of Part 3 (taxable benefits: cars, vans etc)), and

(b) the cash equivalent (calculated in accordance with that Chapter) of the benefit of any fuel provided for the car by reason of the employment.

(5) Section 290C(2) (provisions of benefits code not applicable to lower-paid ministers of religion) is to be disregarded for the purpose of determining any amount under this section.

290G

(1) This section applies if a person is employed in two or more related employments.

(2) None of the employments is to be regarded as lower-paid employment as a minister of religion in relation to a tax year if—

(a) the total of the earnings rates for the employments for the year (calculated in each case under section 290E) is £8,500 or more, or

(b) any of them is an employment falling outside the exclusion contained in section 290C(2) (provisions of benefits code not applicable to lower-paid ministers of religion).

(3) For the purposes of this section two employments are “related” if—

(a) both are with the same employer, or

(b) one is with a body or partnership (“A”) and the other is either—

(i) with an individual, partnership or body that controls A (“B”), or

(ii) with another partnership or body also controlled by B.

(4) Section 69 (extended meaning of “control”) applies for the purposes of this section as it applies for the purposes of the benefits code.

Carers

306A

(1) For the purposes of this section an individual is employed as a home care worker if the duties of the employment consist wholly or mainly of the provision of personal care to another individual (“the recipient”) at the recipient's home, in a case where the recipient is in need of personal care because of—

(a) old age,

(b) mental or physical disability,

(d) past or present illness, or

(e) past or present mental disorder.

(2) No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of the provision of board or lodging (or both) to an individual employed as a home care worker if the provision is—

(a) on a reasonable scale,

(b) at the recipient's home, and

611A

(1) Chapter 17 of this Part provides exemptions for certain annuities (see sections 646B to 646E: certain beneficiaries' annuities purchased out of unused or drawdown funds).

(2) See also paragraph 45A of Schedule 36 to FA 2004 (exemption in certain cases for payments on or after 6 April 2015 to beneficiaries under joint-life or similar annuities purchased before 6 April 2006).

646B

(1) The charge to tax under this Part does not apply to a dependants' annuity, or nominees' annuity, payable to a person if—

(a) it is paid in respect of a deceased member of a registered pension scheme who had not reached the age of 75 at the date of the member's death,

(b) the member died on or after 3 December 2014,

(i) the annuity was purchased using unused drawdown funds or unused uncrystallised funds, or

(ii) the annuity was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity that was payable to the person by that other company, and was a dependants' annuity or nominees' annuity (as the case may be) purchased as mentioned in sub-paragraph (i) or this sub-paragraph, ceasing to be payable,

(d) in a case where the annuity is purchased as mentioned in paragraph (c)(i) and using (whether or not exclusively) unused uncrystallised funds, the person became entitled to it before the end of the period of two years beginning with the earlier of—

(i) the day on which the scheme administrator first knew of the member's death, and

(ii) the day on which the scheme administrator could first reasonably have been expected to know of the death,

(e) in a case where the annuity is purchased as mentioned in paragraph (c)(ii) and the prior annuity purchased as mentioned in paragraph (c)(i) was purchased using (whether or not exclusively) unused uncrystallised funds, the person became entitled to that prior annuity before the end of the period of two years specified in paragraph (d),

(f) no payment of the annuity is made before 6 April 2015, and

(g) in a case where the annuity is purchased as mentioned in paragraph (c)(ii), no payment is made before 6 April 2015 of—

(i) the prior annuity purchased as mentioned in paragraph (c)(i), and

(ii) any other annuity purchased as mentioned in paragraph (c)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity.

(2) The charge to tax under this Part does not apply to a successor's annuity payable to a person if—

(a) it is paid in respect of a deceased member of a registered pension scheme,

(b) it is paid on the subsequent death of a dependant, nominee or successor of the member (“the beneficiary”),

(d) the beneficiary died on or after 3 December 2014,

(e) either—

(i) the annuity was purchased using undrawn funds, or

(ii) the annuity was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity that was payable to the person by that other company, and was a successors' annuity purchased as mentioned in sub-paragraph (i) or this sub-paragraph, ceasing to be payable,

(f) no payment of the annuity is made before 6 April 2015, and

(g) in a case where the annuity is purchased as mentioned in paragraph (e)(ii), no payment is made before 6 April 2015 of—

(i) the prior annuity purchased as mentioned in paragraph (e)(i), and

(ii) any other annuity purchased as mentioned in paragraph (e)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity.

(3) The charge to tax under this Part does not apply to a dependants' annuity or nominees' annuity payable to a person if—

(a) it is paid in respect of a deceased member of a registered pension scheme who had not reached the age of 75 at the date of the member's death,

(b) the member died on or after 3 December 2014,

(i) was purchased together with a lifetime annuity payable to the member, or

(ii) was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity that was payable to the person by that other company, and was a dependants' annuity or nominees' annuity (as the case may be) purchased as mentioned in sub-paragraph (i) or this sub-paragraph, ceasing to be payable,

(d) no payment of the annuity is made before 6 April 2015, and

(e) in a case where the annuity is purchased as mentioned in paragraph (c)(ii), no payment is made before 6 April 2015 of—

(i) the prior annuity purchased as mentioned in paragraph (c)(i), and

(ii) any other annuity purchased as mentioned in paragraph (c)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity.

(4) The charge to tax under this Part does not apply to payments to a person of a lifetime annuity if—

(a) the payments are payable to the person under pension rule 2 (see section 165 of FA 2004),

(b) either—

(i) a member of a registered pension scheme was entitled to be paid the annuity immediately before the member's death, or

(ii) the annuity was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity to which there was entitlement as mentioned in sub-paragraph (i), or which was purchased as mentioned in this sub-paragraph, ceasing to be payable,

(d) the member died on or after 3 December 2014,

(e) any payment of the annuity made before 6 April 2015 is made to the member, and

(f) in a case where the annuity is one purchased as mentioned in paragraph (b)(ii), any payment made before 6 April 2015—

(i) of the prior annuity to which there is entitlement as mentioned in paragraph (b)(i), or

(ii) of any other annuity purchased as mentioned in paragraph (b)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity,

is made to the member.

(5) Paragraph 27E(3) to (5) of Schedule 28 to FA 2004 (meaning of “unused drawdown funds” and “unused uncrystallised funds”) apply for the purposes of subsection (1).

(6) Paragraph 27FA(2) of Schedule 28 to FA 2004 (meaning of “undrawn funds”) applies for the purposes of subsection (2)(e).

(7) For the purposes of subsection (3)(c), a dependants' annuity or nominees' annuity is purchased together with a lifetime annuity if the dependants' annuity or nominees' annuity (as the case may be) is related to the lifetime annuity, and paragraph 3(4A) and (4B) of Schedule 29 to FA 2004 (meaning of “related”) apply for the purposes of this subsection.

(8) For the purposes of this section, a person becomes entitled to an annuity when the person first acquires an actual (rather than a prospective right) to receive the annuity.

646C

(1) The charge to tax under this Part does not apply to a dependants' short-term annuity, nominees' short-term annuity, dependants' annuity or nominees' annuity paid to a person if—

(a) it is paid in respect of a deceased member of a registered pension scheme who had not reached the age of 75 at the date of the member's death,

(b) the member died on or after 3 December 2014, and

(i) dependant's drawdown pension fund,

(ii) dependant's flexi-access drawdown fund, or

(iii) nominee's flexi-access drawdown fund,

in respect of a money purchase arrangement under a registered pension scheme.

(2) The charge to tax under this Part does not apply to a successors' short-term annuity, or successors' annuity, paid to a person if—

(a) it is paid in respect of a deceased beneficiary of a deceased member of a registered pension scheme where the beneficiary had not reached the age of 75 at the date of the beneficiary's death,

(b) the beneficiary died on or after 3 December 2014, and

(c) the annuity was purchased using sums or assets out of the person's successor's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme,

and here “beneficiary” means dependant, nominee or successor.

(3) Subsection (1) is subject to subsections (4) to (6).

(4) Subsection (1) does not exempt payments on or after 6 April 2015 to a person of a dependants' short-term annuity, or dependants' annuity, payable in respect of a deceased member of a registered pension scheme and purchased using sums or assets out of the person's dependant's drawdown pension fund in respect of a money purchase arrangement under a registered pension scheme (“the drawdown fund”) if before 6 April 2015—

(a) any payment of the annuity was made,

(b) any payment was made of any other dependants' short-term annuity, or dependants' annuity, purchased using sums or assets out of—

(i) the drawdown fund, or

(ii) any fund represented (to any extent) by the drawdown fund, or

(i) the drawdown fund, or

(ii) any fund represented (to any extent) by the drawdown fund.

(5) Subsection (1) does not exempt payments to a person of a dependants' short-term annuity, or dependants' annuity, payable in respect of a deceased member of a registered pension scheme and purchased using sums or assets out of the person's dependant's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme (“the new fund”) if—

(a) any of the sums or assets that make up the new fund—

(i) became newly-designated dependant funds under paragraph 22A(2)(b) of Schedule 28 to FA 2004 or as a result of the operation of any of paragraphs 22B to 22D of that Schedule, or

(ii) arise, or (directly or indirectly) derive, from any such newly-designated funds or from sums or assets that to any extent so arise or derive,

(b) before 6 April 2015—

(i) any payment of dependants' income withdrawal in respect of the deceased member was made to the person from, or

(ii) any payment in respect of the deceased member was made to the person of a dependants' short-term annuity, or dependants' annuity, purchased using sums or assets out of,

the person's dependant's drawdown pension fund in respect of a money purchase arrangement under a registered pension scheme, and

(c) any of the sums or assets that made up that fund at the time of the payment make up, or are represented by sums or assets that to any extent make up, the new fund.

(6) Where relevant unused uncrystallised funds—

(a) are designated on or after 6 April 2015 as available for the payment of dependants' drawdown pension or nominees' drawdown pension, and

(b) as a result of the designation make up (to any extent) a person's dependant's flexi-access drawdown fund or nominee's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme, but

subsection (1) does not exempt payments to the person of a dependants' short-term annuity, nominees' short-term annuity, dependants' annuity or nominees' annuity if any of the sums or assets used to purchase the annuity represent, at the time of the purchase, the whole or any part of those relevant unused uncrystallised funds.

(7) In this section “the relevant two-year period”, in relation to relevant unused uncrystallised funds held for the purposes of a money purchase arrangement relating to a deceased individual under a registered pension scheme, means the period of two years beginning with the earlier of—

(a) the day on which the scheme administrator first knew of the individual's death, and

(b) the day on which the scheme administrator could first reasonably have been expected to know of it.

(8) For the purposes of this section, sums or assets held after the death of a member of a registered pension scheme for the purposes of a money purchase arrangement relating to the member under the scheme are “relevant unused uncrystallised funds” if—

(a) they are unused uncrystallised funds, and

(b) the member had not reached the age of 75 at the date of the member's death.

(9) Paragraph 27E(4) and (5) of Schedule 28 to FA 2004 (meaning of “unused uncrystallised funds”) apply for the purposes of subsection (8)(a).

646D

(1) The charge to tax under this Part does not apply to an annuity payable to a person if—

(a) it is paid in respect of a deceased member of an overseas pension scheme, or relevant non-UK scheme, who had not reached the age of 75 at the date of the member's death,

(b) it would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8), be a dependants' annuity or nominees' annuity,

(d) either—

(i) the annuity was purchased using sums or assets that would, if the scheme were a registered pension scheme, be unused drawdown funds or unused uncrystallised funds, or

(ii) the annuity was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity—

(a) that was payable to the person by that other insurance company,

(b) that was purchased as mentioned in sub-paragraph (i) or this sub-paragraph, and

(c) that would have been a dependants' annuity or nominees' annuity (as the case may be) if the scheme had been a registered pension scheme,

ceasing to be payable,

(e) no payment of the annuity is made before 6 April 2015, and

(f) in a case where the annuity is purchased as mentioned in paragraph (d)(ii), no payment is made before 6 April 2015 of—

(i) the prior annuity purchased as mentioned in paragraph (d)(i), and

(ii) any other annuity purchased as mentioned in paragraph (d)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity.

(2) The charge to tax under this Part does not apply to an annuity payable to a person if—

(a) it is paid in respect of a deceased member of an overseas pension scheme or relevant non-UK scheme,

(b) it is paid on the subsequent death of an individual who would, if the scheme were a registered pension scheme, be a dependant, nominee or successor of the member (“the beneficiary”),

(c) it would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8), be a successors' annuity,

(d) the beneficiary had not reached the age of 75 at the date of the beneficiary's death,

(e) the beneficiary died on or after 3 December 2014,

(f) either—

(i) the annuity was purchased using sums or assets that would, if the scheme were a registered pension scheme, be undrawn funds, or

(ii) the annuity was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity—

(a) that was payable to the person by that other insurance company,

(b) that was purchased as mentioned in sub-paragraph (i) or this sub-paragraph, and

(c) that would have been a successors' annuity if the scheme had been a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8),

ceasing to be payable,

(g) no payment of the annuity is made before 6 April 2015, and

(h) in a case where the annuity is purchased as mentioned in paragraph (f)(ii), no payment is made before 6 April 2015 of—

(i) the prior annuity purchased as mentioned in paragraph (f)(i), and

(ii) any other annuity purchased as mentioned in paragraph (f)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity.

(3) The charge to tax under this Part does not apply to an annuity payable to a person if—

(a) it is paid in respect of a deceased member of an overseas pension scheme, or relevant non-UK scheme, who had not reached the age of 75 at the date of the member's death,

(b) it would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8), be a dependants' annuity payable to a dependant of the member or a nominees' annuity payable to a nominee of the member,

(d) the annuity—

(i) was purchased together with an annuity payable to the member that would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8), have been a lifetime annuity, or

(ii) was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity—

(a) that was payable to the person by that other insurance company, and

(b) that would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8), have been a dependants' annuity or nominees' annuity (as the case may be) purchased as mentioned in sub-paragraph (i) or this sub-paragraph,

ceasing to be payable,

(e) no payment of the annuity is made before 6 April 2015, and

(f) in a case where the annuity is purchased as mentioned in paragraph (d)(ii), no payment is made before 6 April 2015 of—

(i) the prior annuity purchased as mentioned in paragraph (d)(i), and

(ii) any other annuity purchased as mentioned in paragraph (d)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity.

(4) The charge to tax under this Part does not apply to payments to a person of an annuity if—

(a) either—

(i) a member of an overseas pension scheme, or relevant non-UK scheme, was entitled to be paid the annuity immediately before the member's death, or

(ii) the annuity was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity to which there was entitlement as mentioned in sub-paragraph (i), or which was purchased as mentioned in this sub-paragraph, ceasing to be payable,

(b) the payments would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8), be—

(i) payments of a lifetime annuity, and

(ii) payable to the person under pension rule 2 (see section 165 of FA 2004),

(d) the member died on or after 3 December 2014,

(e) any payment of the annuity made before 6 April 2015 is made to the member, and

(f) in a case where the annuity is one purchased as mentioned in paragraph (a)(ii), any payment made before 6 April 2015—

(i) of the prior annuity to which there is entitlement as mentioned in paragraph (a)(i), or

(ii) of any other annuity purchased as mentioned in paragraph (a)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity,

is made to the member.

(5) Paragraph 27E(3) to (5) of Schedule 28 to FA 2004 (meaning of “unused drawdown funds” and “unused uncrystallised funds”) apply for the purposes of subsection (1).

(6) Paragraph 27FA(2) of Schedule 28 to FA 2004 (meaning of “undrawn funds”) applies for the purposes of subsection (2)(f).

(7) For the purposes of subsection (3)(d), an annuity is purchased together with another if they are purchased—

(a) in the form of a joint life annuity, or

(b) separately in circumstances in which the day on which the one is purchased is no earlier than seven days before, and no later than seven days after, the day on which the other is purchased.

(8) In this section “insurance company” means—

(a) an insurance company as defined by section 275 of FA 2004, or

(b) a person—

(i) whose normal business includes the activity of providing annuities,

(ii) who carries on that activity in a country or territory outside the United Kingdom, and

(iii) whose carrying on of that activity in any particular country or territory outside the United Kingdom—

(a) is regulated in that country or territory, or

(b) is lawful under the law of that country or territory because it is regulated in another country or territory,

and for this purpose an activity is regulated in a country or territory if it is regulated by the government of that country or territory or by a body established under the law of that country or territory for the purpose of regulating the carrying-on of the activity.

646E

(1) The charge to tax under this Part does not apply to an annuity paid to a person if—

(a) it is paid in respect of a deceased member of an overseas pension scheme, or a relevant non-UK scheme, who had not reached the age of 75 at the date of the member's death,

(b) the person would, if that scheme were a registered pension scheme, be a dependant or nominee of the member,

(c) the annuity was purchased using sums or assets held for the purposes of a money purchase arrangement under an overseas pension scheme or relevant non-UK scheme, and those sums or assets would if that scheme were a registered pension scheme form the whole or part of the person's—

(i) dependant's drawdown pension fund,

(ii) dependant's flexi-access drawdown fund, or

(iii) nominee's flexi-access drawdown fund,

in respect of the arrangement,

(d) the annuity would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by section 646D(8), be a dependants' short-term annuity or dependants' annuity or (as the case may be) a nominees' short-term annuity or nominees' annuity, and

(e) the member died on or after 3 December 2014.

(2) The charge to tax under this Part does not apply to an annuity payable to a person if—

(a) it is paid in respect of a deceased individual (“the beneficiary”) who had not reached the age of 75 at the date of the beneficiary's death,

(b) the beneficiary would have been a dependant, nominee or successor of a deceased member of an overseas pension scheme, or relevant non-UK scheme, if that scheme had been a registered pension scheme,

(d) the annuity was purchased using sums or assets out of a fund held for the purposes of a money purchase arrangement under an overseas pension scheme or relevant non-UK scheme and would, if that scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by section 646D(8), be a successors' short-term annuity, or successors' annuity, purchased using sums or assets out of the person's successor's flexi-access drawdown fund in respect of the arrangement, and

(e) the beneficiary died on or after 3 December 2014.

(3) Subsection (1) is subject to subsections (4) and (5).

(4) Subsection (1) does not exempt payments on or after 6 April 2015 to a person of an annuity payable in respect of a deceased member of an overseas pension scheme, or relevant non-UK scheme, if—

(a) the annuity is purchased using sums or assets held for the purposes of a money purchase arrangement under an overseas pension scheme or relevant non-UK scheme,

(b) the annuity would, if that scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by section 646D(8), be a dependants' short-term annuity or dependants' annuity,

(c) the annuity was purchased using sums or assets out of a fund that would, if that scheme were a registered pension scheme, be the person's dependant's drawdown pension fund in respect of the arrangement (“the drawdown fund”), and

(d) before 6 April 2015—

(i) any payment of the annuity was made,

(ii) any payment was made to the person of any other annuity purchased using sums or assets out of the drawdown fund or out of any fund represented (to any extent) by the drawdown fund, or

(iii) any payment was made to the person out of the drawdown fund, or out of any fund represented (to any extent) by the drawdown fund, of any pension that would be dependants' income withdrawal if the fund concerned were held for the purposes of a registered pension scheme.

(5) Subsection (1) does not exempt payments to a person of an annuity payable in respect of a deceased member of an overseas pension scheme, or relevant non-UK scheme, if—

(a) the annuity was purchased using sums or assets held for the purposes of a money purchase arrangement under an overseas pension scheme or relevant non-UK scheme and would, if that scheme were a registered pension scheme and “insurance company” in Part 4 of FA 2004 had the meaning given by section 646D(8), be a dependants' short-term annuity or dependants' annuity,

(b) the annuity was purchased using sums or assets out of a fund (“the new fund”) that would, if that scheme were a registered pension scheme, be the person's dependant's flexi-access drawdown fund in respect of the arrangement,

(i) any payment of pension in respect of the deceased member was made to the person from a fund held for the purposes of a money purchase arrangement under an overseas pension scheme, or relevant non-UK scheme, that would be a payment of dependants' income withdrawal from the person's dependant's drawdown pension fund in respect of the arrangement if the scheme were a registered pension scheme, or

(ii) any payment in respect of the deceased member was made to the person of an annuity purchased using sums or assets out of a fund held for the purposes of a money purchase arrangement under an overseas pension scheme, or relevant non-UK scheme, that would be a payment of a dependants' short-term annuity, or dependants' annuity, purchased using sums or assets out of the person's dependant's drawdown pension fund in respect of the arrangement if the scheme were a registered pension scheme, and

(d) any of the sums or assets that made up the fund mentioned in paragraph (c)(i) or (ii) make up, or are represented by sums or assets that to any extent make up, the new fund.

646F

In sections 646B to 646E, an expression listed in the first column of the table has the meaning given by the provision of FA 2004 listed against that expression in the second column of the table.

Amount of gain realised on occurrence of chargeable event

Relief for secondary Class 1 contributions met by employee

Temporary non-residents

Former employee entitled to deduction in calculating net income

Person liable for tax

Enquiries

Notice of scheme to be given to HMRC

41F

(1) This section applies if—

(a) an amount counts under Chapters 2 to 5 of Part 7 (employment-related securities etc) as employment income of an individual for a tax year (“the securities income”) in respect of an employment (“the relevant employment”), and

(b) one or more of the international mobility conditions is met in relation to the individual (see subsection (2)).

(2) The “international mobility conditions” are—

(a) that any part of the relevant period (see section 41G) is within a tax year for which section 809B, 809D or 809E of ITA 2007 (remittance basis) applied to the individual;

(b) that any part of the relevant period is within a tax year for which the individual is not UK resident;

(c) that any part of the relevant period is within the overseas part of a tax year that is a split year with respect to the individual.

(3) An amount equal to—

$SI − FSI$

is an amount of “taxable specific income” from the relevant employment for the tax year mentioned in subsection (1)(a).

(4) In subsection (3)—

(a) SI is the amount of the securities income, and

(b) FSI is the amount of the securities income that is “foreign”.

(5) The amount of the securities income that is “foreign” is the sum of any chargeable foreign securities income and any unchargeable foreign securities income (see sections 41H to 41L).

(6) The full amount of any chargeable foreign securities income which is remitted to the United Kingdom in a tax year is an amount of “taxable specific income” from the relevant employment for that year.

(7) Subsection (6) applies whether or not the relevant employment is held when the chargeable foreign securities income is remitted.

(8) For the purposes of Chapter A1 of Part 14 of ITA 2007 (remittance basis), treat the relevant securities or relevant securities option as deriving from the chargeable foreign securities income.

(9) But where—

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Income Tax (Earnings and Pensions) Act 2003

312D

312E

312F

312G

312H

312I

430A

Application of this Chapter where share option exchanged for another

Charge on cancellation payments in respect of partnership share agreement

Interpretation: persons linked with A

Amount charged to tax

Employment intermediaries: information powers

716B

Exemptions and liabilities for certain lump sums under registered pension schemes

Tax tables

Notice of scheme to be given to HMRC

Notices and returns to be given electronically etc

Annual returns

Appeals

Annual returns

Enquiries

Assessment of penalties

Annual returns

Notice of scheme to be given to HMRC

Appeals

Notices and returns to be given electronically etc

579CZA

Recommended medical treatment

320C

CHAPTER 7A — Exemptions: amounts which would otherwise be deductible

289A

289B

289C

289D

289E

290C

290D

290E

290F

290G

Carers

306A

611A

646B

646C

646D

646E

646F

Amount of gain realised on occurrence of chargeable event

Relief for secondary Class 1 contributions met by employee

Temporary non-residents

Former employee entitled to deduction in calculating net income

Person liable for tax

Enquiries

Notice of scheme to be given to HMRC

CHAPTER 5B — Taxable specific income from employment-related securities etc: internationally mobile employees

41F