Finance Act 2004

(228A) (1) Sections 228B to 228E apply where— (a) plant or machinery is the subject of a sale and finance leaseback for the purposes of section 221, and (b) section 222 (restriction of disposal value) applies. (2) Sections 228B to 228D also apply, with the modifications set out in section 228F, where plant or machinery is the subject of a lease and finance leaseback (as defined in section 228F). (228B) (1) For the purpose of income tax or corporation tax, in calculating the lessee’s income or profits for a period of account the amount deducted in respect of amounts payable under the leaseback may not exceed the permitted maximum. (2) The permitted maximum is the total of— (a) finance charges shown in the accounts, and (b) depreciation, taking the value of the plant or machinery at the beginning of the leaseback to be the restricted disposal value. (3) In relation to a period of account during which the leaseback terminates, the permitted maximum shall also include an amount calculated in accordance with subsection (4). (4) The calculation is— $$CurrentBookValue×OriginalConsiderationOriginalBookValue$where—“Current Book Value” means the net book value of the leased plant or machinery immediately before the termination,“Original Consideration” means the consideration payable to S for entering into the relevant transaction, and“Original Book Value” means the net book value of the leased plant or machinery at the beginning of the leaseback.$ (228C) (1) Subsection (2) applies where the leaseback terminates. (2) For the purpose of the calculation of income tax or corporation tax, the income or profits of the lessee from the relevant qualifying activity for the period in which the termination occurs shall be increased by an amount calculated in accordance with subsection (3). (3) The calculation is— $$NetConsideration×CurrentBookValueOriginalBookValue$where—“Net Consideration” means—(a) the consideration payable to S for entering into the relevant transaction, minus(b) the restricted disposal value,“Current Book Value” means the net book value of the leased plant or machinery immediately before the termination, and“Original Book Value” means the net book value of the leased plant or machinery at the beginning of the leaseback.$ (4) In this section “relevant qualifying activity” means the qualifying activity for the purposes of which the leased plant or machinery was used immediately before the termination. (5) Section 228B has no effect on the treatment for the purposes of income tax or corporation tax of amounts received by way of refund on the termination of a leaseback of amounts payable under it. (6) In subsection (5), “amounts received by way of refund” includes any amount that would be so received in respect of the lessee’s interest under the leaseback if any amounts due to the lessor under the leaseback were disregarded. (228D) (1) This section applies in relation to the calculation of the lessor’s income or profits for a period of account for the purpose of income tax or corporation tax. (2) Where— (a) an amount receivable in respect of the lessor’s interest under the leaseback falls to be taken into account in that calculation, and (b) that amount is reduced by an amount due to the lessee under the leaseback, that reduction shall be disregarded when taking the amount receivable into account. (3) The amounts receivable in respect of the lessor’s interest under the leaseback that fall to be taken into account in that calculation may be disregarded to the extent that they exceed the permitted threshold (whether or not subsection (2) applies). (4) The permitted threshold is the total of— (a) gross earnings, and (b) the allowable proportion of the capital repayment. (5) In subsection (4)(a) “gross earnings” means the amount shown in the lessor’s accounts in respect of the lessor’s gross earnings under the leaseback. (6) In subsection (4)(b) “allowable proportion of the capital repayment” means the amount obtained by this calculation— $$RestrictedDisposalValue×InvestmentReductionForPeriodNetInvestment$where—“Investment Reduction For Period” means the amount shown in the lessor’s accounts in respect of the reduction in net investment in the leaseback, and“Net Investment” means the amount shown in the lessor’s accounts as the lessor’s net investment in the leaseback at the beginning of its term.$ (7) This section does not apply to a leaseback if the lessee is a lessee by way of an assignment made before 17 March 2004. (228E) (1) Subsection (2) applies where— (a) the leaseback terminates, (b) the lessor disposes of the plant or machinery, and (c) the amount of the disposal value required to be brought into account because of that disposal is limited by section 62. (2) For the purpose of income tax or corporation tax, in calculating the lessor’s income or profits for the period in which the termination occurs the amount deducted in respect of any amount refunded to the lessee may not exceed the amount to which the disposal value is limited by section 62. (228F) (1) Sections 228B, 228C and 228D apply, with the following modifications, where plant or machinery is the subject of a lease and finance leaseback. (2) In determining the permitted maximum for the purposes of section 228B, depreciation shall be disregarded. (3) In the calculation under section 228C(3), the amount of the consideration referred to in subsection (6)(b) of this section shall be substituted for the Net Consideration. (4) In determining the permitted threshold for the purposes of section 228D, the allowable proportion of the capital repayment shall be disregarded. (5) Plant or machinery is the subject of a lease and finance leaseback if— (a) a person (“S”) leases the plant or machinery to another (“B”), (b) after the date of that transaction, the use of the plant or machinery falls within sub-paragraph (i), (ii) or (iii) of section 221(1)(b), and (c) it is directly as a consequence of having been leased under a finance lease that the plant or machinery is available to be so used after that date. (6) For the purposes of subsection (5), S leases the plant or machinery to B only if— (a) S grants B rights over the plant or machinery, (b) consideration is given for that grant, and (c) S is not required to bring all of that consideration into account under this Part. (7) Plant or machinery is not the subject of a lease and finance leaseback for the purposes of this section in any case where the condition in subsection (6)(c) is met only because of an election under section 199 made before 18 May 2004. (8) In the application of sections 228B to 228D in relation to a lease and finance leaseback— (a) references to the lessee are references to the person referred to as S in this section, and (b) references to the lessor are references to the person referred to as B in this section or, where appropriate, to an assignee of that person. (228G) (1) Sections 228B and 228C are subject to this section in their application in relation to a leaseback that is not accounted for as a finance lease in the accounts of the lessee. (2) Subsection (3) applies where the leaseback is accounted for as a finance lease in the accounts of a person connected with the lessee; and in that subsection “relevant calculation” means the calculation of— (a) the permitted maximum for the purposes of section 228B, or (b) the amount by which the income or profits of the lessee are to be increased in accordance with section 228C. (3) Where an amount that falls to be used for the purposes of a relevant calculation— (a) cannot be ascertained by reference to the lessee’s accounts because the leaseback is not accounted for as a finance lease in those accounts, but (b) can be ascertained by reference to the connected person’s accounts for one or more periods, that amount as ascertained by reference to the connected person’s accounts shall be used for the purposes of the relevant calculation. (4) Subsections (5) and (6) apply in a case where the leaseback is not accounted for as a finance lease in the accounts of a person connected with the lessee. (5) Sections 228B and 228C do not apply in relation to the leaseback. (6) If the term of the leaseback begins on or after 18 May 2004 then, for the purposes of income tax or corporation tax, the income or profits of the lessee from the relevant qualifying activity for the period of account during which the term of the leaseback begins shall be increased by— (a) the net consideration for the purposes of section 228C(3) (in the case of a sale and finance leaseback), or (b) the consideration referred to in section 228F(6)(b) (in the case of a lease and finance leaseback). (7) For the purposes of this section the leaseback is accounted for as a finance lease in a person’s accounts if— (a) the leaseback falls, under generally accepted accounting practice, to be treated in that person’s accounts as a finance lease or loan, or (b) in a case where the leaseback is comprised in other arrangements, those arrangements fall, under generally accepted accounting practice, to be so treated. (228H) (1) In sections 228A to 228G— - “lessee” does not include a person who is lessee by way of an assignment; - the “net book value”of leased plant or machinery means the book value of the plant or machinery having regard to any relevant entry in the lessee’s accounts, but— 1. also having regard to depreciation up to the time in question, and 2. disregarding any revaluation gains or losses and any impairments; - “restricted disposal value” means the disposal value under section 222; - “termination” in relation to a leaseback includes (except in section 228E)— 1. the assignment of the lessee’s interest, 2. the making of any arrangements (apart from an assignment of the lessee’s interest) under which a person other than the lessee becomes liable to make some or all payments under the leaseback, and 3. a variation as a result of which the leaseback ceases to be a finance lease. (2) In a case where accounts drawn up are not correct accounts, or no accounts are drawn up— (a) the provisions of sections 228A to 228G apply as if correct accounts had been drawn up, and (b) amounts referred to in any of those sections as shown in accounts are those that would have been shown in correct accounts. (3) In a case where accounts are drawn up in reliance upon amounts derived from an earlier period of account for which correct accounts were not drawn up, or no accounts were drawn up, amounts referred to in sections 228A to 228G as shown in the accounts for the later period are those that would have been shown if correct accounts had been drawn up for the earlier period. (4) In subsections (2) and (3) “correct accounts” means accounts drawn up in accordance with generally accepted accounting practice. (228J) (1) This section applies where— (a) plant or machinery is the subject of— (i) a sale and finance leaseback, or (ii) a lease and finance leaseback, and (b) some or all of the plant or machinery becomes, while the subject of the leaseback, also the subject of a lease in relation to which the following conditions are met— (i) the term of the lease begins on or after 18 May 2004; (ii) S, or a person connected with S, is the lessee under the lease; (iii) the lease is not accounted for as a finance lease in the accounts of the lessee. (2) For the purpose of income tax or corporation tax, in calculating the lessee’s income or profits for a period of account the amount deducted in respect of amounts payable under the operating lease shall not exceed the relevant amount. (3) Subsections (4) and (5) apply in relation to the calculation of the lessor’s income or profits for a period of account for the purpose of income tax or corporation tax. (4) Where— (a) an amount receivable in respect of the lessor’s interest under the operating lease falls to be taken into account in that calculation, and (b) that amount is reduced by an amount due to the lessee under the operating lease, that reduction shall be disregarded when taking the amount receivable into account. (5) The amounts receivable in respect of the lessor’s interest under the operating lease that fall to be taken into account in that calculation may be disregarded to the extent that they exceed the relevant amount (whether or not subsection (4) applies). (6) Where only some of the plant or machinery is the subject of the operating lease, subsections (2) to (5) shall apply subject to such apportionments as may be just and reasonable. (7) For the purposes of this section a lease is accounted for as a finance lease in a person’s accounts if— (a) the lease falls, under generally accepted accounting practice, to be treated in that person’s accounts as a finance lease or loan, or (b) in a case where the lease is comprised in other arrangements, those arrangements fall, under generally accepted accounting practice, to be so treated. (8) In this section— - “lease and finance leaseback” has the meaning given in section 228F; - “lessee” means the lessee under the operating lease; - “lessor” means the lessor under the operating lease; - “operating lease” means the lease referred to in subsection (1)(b); - “relevant amount” means an amount equal to the permitted maximum under section 228B as it applies in relation to the leaseback.

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• (2) In sections 228A to 228J of the Capital Allowances Act 2001 (c. 2) (as inserted by subsection (1) above), a reference to a provision of that Act includes a reference to an equivalent provision of the Capital Allowances Act 1990 (c. 1) (with any necessary modification).

• (3) This section applies to income tax and corporation tax chargeable in relation to periods that end on or after 17 March 2004.

• (4) Schedule 23 contains transitional provision.

Rent factoring of leases of plant or machinery

135

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Manufactured dividends

136

Schedule 24 to this Act (which makes provision in relation to cases where payments are or have been made, or treated as made, which are representative of dividends on shares of companies resident in the United Kingdom) has effect.

Manufactured payments under arrangements having an unallowable purpose

137

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gilt strips

138

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Gifts of shares, securities and real property to charities etc

139

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Life policies etc.: restriction of corresponding deficiency relief

140

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Chapter 11 — Miscellaneous

Reliefs for business

Relief for research and development: software and consumable items

141

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Temporary increase in amount of first-year allowances for small enterprises

142

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Deduction for expenditure by landlords on energy-saving items

143

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Lloyd’s names: conversion to limited liability underwriting

144

Schedule 25 to this Act (which makes provision for certain reliefs to be available where a member of Lloyd’s converts to limited liability underwriting) has effect.

Offshore matters

Offshore funds

145

• (1) The provisions of the Taxes Act 1988 relating to offshore funds are amended in accordance with Schedule 26 to this Act.

• (2) Except as otherwise provided—

• (a) the amendments have effect for account periods (within the meaning of Chapter 5 of Part 17 of that Act) ending on or after the day on which this Act is passed, and

• (b) regulations made under a power conferred by virtue of any of the amendments may be made so as to have effect in relation to any such account period.

Meaning of “offshore installation”

146

Schedule 27 to this Act (which makes amendments relating to the meaning of “offshore installation”) has effect.

Health

Immediate needs annuities

147

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Corporation tax: health service bodies

148

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Part 4 — Pension schemes etc

Chapter 1 — Introduction

Introductory

Overview of Part 4

149

• (1) This Part contains tax provision about pension schemes and other similar schemes.

• (2) This Chapter defines some basic concepts.

• (3) As for the rest of this Part—

• Chapter 2 is about the registration and de-registration of pension schemes,

• Chapter 3 is about the payments that may be made by registered pension schemes and related matters,

• Chapter 4 deals with tax reliefs and exemptions in connection with registered pension schemes,

• Chapter 5 imposes tax charges in connection with registered pension schemes,

• Chapter 6 is about some schemes that are not registered pension schemes,

• Chapter 7 makes provision about compliance,and

• Chapter 8 contains interpretation and other supplementary provisions.

Main concepts

Meaning of “pension scheme”

150

• (1) In this Part “pension scheme” means a scheme or other arrangements, comprised in one or more instruments or agreements, having or capable of having effect so as to provide benefits to or in respect of persons—

• (a) on retirement,

• (b) on death,

• (c) on having reached a particular age,

• (d) on the onset of serious ill-health or incapacity, or

• (e) in similar circumstances.

• (2) A pension scheme is a registered pension scheme for the purposes of this Part at any time if it is at that time registered under Chapter 2.

• (3) In this Part “public service pension scheme” means a pension scheme—

• (a) established by or under any enactment,

• (b) approved by a relevant governmental or Parliamentary person or body, or

• (c) specified in an order made by the Treasury.

• (4) In subsection (3) “a relevant governmental or Parliamentary person or body” means—

• (a) a Minister of the Crown or a government department,

• (b) the Scottish Parliament, the Scottish Parliamentary Corporate Body or a member of the Scottish Executive,

• (c) the National Assembly for Wales, the National Assembly for Wales Commission or the Welsh Ministers, or

• (d) the Northern Ireland Assembly, the Northern Ireland Assembly Commission, a Northern Ireland Minister, the head of a Northern Ireland department or a Northern Ireland department.

• (5) In this Part “occupational pension scheme” means a pension scheme established by an employer or employers and having or capable of having effect so as to provide benefits to or in respect of any or all of the employees of—

• (a) that employer or those employers, or

• (b) any other employer,

(whether or not it also has or is capable of having effect so as to provide benefits to or in respect of other persons).

• (5A) This Part applies in relation to certain pension schemes that are not occupational pension schemes as it applies in relation to occupational pension schemes (see section 274ZA and paragraph 1(4A) of Schedule 36).

• (6) In this Part “sponsoring employer”, in relation to an occupational pension scheme, means the employer, or any of the employers, to or in respect of any or all of whose employees the pension scheme has, or is capable of having, effect so as to provide benefits.

• (7) In this Part “overseas pension scheme” means a pension scheme (other than a registered pension scheme) which—

• (a) is established in a country or territory outside the United Kingdom, and

• (b) satisfies any requirements prescribed for the purposes of this subsection by regulations made by the Board of Inland Revenue.

• (8) In this Part “recognised overseas pension scheme” means an overseas pension scheme which satisfies any requirements prescribed for the purposes of this subsection by regulations made by the Commissioners for Her Majesty's Revenue and Customs.

Meaning of “member”

151

• (1) In this Part “member” in relation to a pension scheme, means any active member, pensioner member, deferred member or pension credit member of the pension scheme.

• (2) For the purposes of this Part a person is an active member of a pension scheme if there are presently arrangements made under the pension scheme for the accrual of benefits to or in respect of the person.

• (3) For the purposes of this Part a person is a pensioner member of a pension scheme if the person is entitled to the present payment of benefits under the pension scheme and is not an active member.

• (4) A person is a deferred member of a pension scheme if the person has accrued rights under the pension scheme and is neither an active member nor a pensioner member.

• (5) A person is a pension credit member of a pension scheme if the person has rights under the pension scheme which are attributable (directly or indirectly) to pension credits; and, if a person dies having become entitled to pension credits but without having rights attributable to them, the person is to be treated as having acquired, immediately before death, the rights by virtue of which the liability in respect of the pension credits is subsequently discharged.

Meaning of “arrangement”

152

• (1) In this Part “arrangement”, in relation to a member of a pension scheme, means an arrangement relating to the member under the pension scheme.

• (2) For the purposes of this Part an arrangement is a “money purchase arrangement” at any time if, at that time, all the benefits that may be provided to or in respect of the member under the arrangement are cash balance benefits , collective money purchase benefits or other money purchase benefits.

• (3) For the purposes of this Part a money purchase arrangement is a “cash balance arrangement” at any time if, at that time, all the benefits that may be provided to or in respect of the member under the arrangement are cash balance benefits.

• (3A) For the purposes of this Part a money purchase arrangement is a “collective money purchase arrangement” at any time if, at that time, all the benefits that may be provided to or in respect of the member under the arrangement are collective money purchase benefits.

• (4) In this Part “money purchase benefits”, in relation to a member of a pension scheme, means benefits the rate or amount of which is calculated by reference to an amount available for the provision of benefits to or in respect of the member (whether the amount so available is calculated by reference to payments made under the pension scheme by the member or any other person in respect of the member or any other factor).

• (4A) The reference in subsection (4) to an amount available for the provision of benefits to or in respect of the member includes, in relation to a collective money purchase arrangement, an amount available for the provision of benefits to or in respect of members collectively.

• (5) In this Part “cash balance benefits” means benefits

• (a) the rate or amount of which is calculated by reference to an amount available for the provision of benefits to or in respect of the member calculated otherwise than wholly by reference to payments made under the arrangement by the member or by any other person in respect of the member (or transfers or other credits) , and

• (b) that are not collective money purchase benefits.

• (5A) In this Part “collective money purchase benefits” means benefits that are

• (a) collective money purchase benefits within the meaning of Part 1 or 2 of the Pension Schemes Act 2021 , or

• (b) payments of CMP periodic income.

• (6) For the purposes of this Part an arrangement is a “defined benefits arrangement” at any time if, at that time, all the benefits that may be provided to or in respect of the member under the arrangement are defined benefits.

• (7) In this Part “defined benefits”, in relation to a member of a pension scheme, means benefits which are not money purchase benefits (but which are calculated by reference to earnings or service of the member or any other factor other than an amount available for their provision).

• (8) For the purposes of this Part an arrangement is a “hybrid arrangement” at any time if, at that time, all of the benefits that may be provided to or in respect of the member under the arrangement are, depending on the circumstances, to be of one of any two, three or four of the varieties specified in subsection (10).

• (9) Where not all of the benefits that may be provided under an arrangement to or in respect of the member are of the same one of the varieties of benefits specified in subsection (10), the arrangement is to be treated for the purposes of this Part as being two, three or four separate arrangements one of which relates to each of the two, three or four varieties of benefits that may be so provided.

• (10) The varieties of benefits mentioned in subsections (8) and (9) are—

• (a) cash balance benefits,

• (b) collective money purchase benefits,

• (c) money purchase benefits that are neither cash balance benefits nor collective money purchase benefits, and

• (d) defined benefits.

Chapter 2 — Registration of pension schemes

Registration

Registration of pension schemes

153

• (1) An application may be made to the Inland Revenue for a pension scheme to be registered.

• (2) The application—

• (a) must contain any information which is reasonably required by the Inland Revenue in any form specified by the Board of Inland Revenue, and

• (b) must be accompanied by a declaration that the application is made by the scheme administrator (see section 270) and any other declarations by the scheme administrator which are reasonably required by the Inland Revenue.

• (3) The declarations which the Inland Revenue may require to accompany an application for the registration of a pension scheme include, in particular, a declaration that the instruments or agreements by which it is constituted do not entitle any person to unauthorised payments (see section 160(5)).

• (4) Following receipt of an application for a pension scheme to be registered the Inland Revenue must decide whether or not to register the pension scheme.

• (5) The Inland Revenue’s decision must be to register the pension scheme unless it appears that—

• (a) any information falling within subsection (5A) is inaccurate in a material respect,

• (b) any document falling within subsection (5B) contains a material inaccuracy,

• (c) any declaration accompanying the application is false,

• (d) the scheme administrator has failed to comply with an information notice under section 153A given in connection with the application (including any declaration accompanying it),

• (e) the scheme administrator has deliberately obstructed an officer of Revenue and Customs in the course of an inspection under section 153B carried out in connection with the application (including any declaration accompanying it) where the inspection has been approved by the tribunal,

• (f) the pension scheme has not been established, or is not being maintained, wholly or mainly for the purpose of making payments falling within section 164(1)(a) or (b) (authorised payments of pensions and lump sums), or

• (g) the person who is, or any of the persons who are, the scheme administrator is not a fit and proper person to be, as the case may be—

• (i) the scheme administrator, or

• (ii) one of the persons who are the scheme administrator , or

• (h) the pension scheme is an occupational pension scheme, and a sponsoring employer in relation to the scheme is a body corporate that has been dormant during a continuous period of one month that falls within the period of one year ending with the day on which the decision is made, or

• (i) the pension scheme is an unauthorised Master Trust scheme.

• (5A) The information falling within this subsection is any information—

• (a) contained in the application, or

• (b) otherwise provided to an officer of Revenue and Customs by the scheme administrator (whether under section 153A or otherwise) in connection with the application (including any declaration accompanying it).

• (5B) The documents falling within this subsection are any documents produced to an officer of Revenue and Customs by the scheme administrator (whether under section 153A or otherwise) in connection with the application (including any declaration accompanying it).

• (5C) The reference in subsection (5)(d) to the scheme administrator having failed to comply with an information notice under section 153A includes a case where the scheme administrator has concealed, destroyed or otherwise disposed of, or has arranged for the concealment, destruction or disposal of, a document in breach of paragraph 42 or 43 of Schedule 36 to the Finance Act 2008 as applied by section 153A(3).

• (6) The Inland Revenue must notify the scheme administrator of the decision on the application.

• (7) Unless the Inland Revenue’s decision is not to register the pension scheme, the notification must state the day on and after which the pension scheme will be a registered pension scheme.

• (8) An annuity contract made with an insurance company—

• (a) by means of which benefits under a registered pension scheme have been secured, but

• (b) which does not provide for the immediate payment of benefits,

is to be treated as having become a registered pension scheme on the day on which it is made.

• (8A) Where an order has been made under section 19(4) or 21(2)(a) of the Pensions Act 2004 or Article 15(4) or 17(2)(a) of the Pensions (Northern Ireland) Order 2005 (restitution by order of court or Pensions Regulator) that property or money be transferred, or a sum be paid, towards an annuity contract made with an insurance company, the annuity contract is to be treated as having become a registered pension scheme on the day on which it is made.

• (9) Schedule 36 contains (in Part 1) provisions treating certain pension schemes in existence immediately before 6th April 2006 as registered pension schemes (and related provisions).

Persons by whom registered pension scheme may be established

154

• (1) An application to register a pension scheme may be made only if the pension scheme—

• (a) is an occupational pension scheme, or

• (b) has been established by a person with permission under FISMA 2000 to establish in the United Kingdom a personal pension scheme or a stakeholder pension scheme.

• (2) But subsection (1) does not apply to a public service pension scheme.

• (2A) Subsection (1) is to be construed in accordance with section 22 of FISMA 2000, any relevant order under that section and Schedule 2 to that Act.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) The Treasury may by order amend this section ....

Persons by whom scheme may be established: supplementary

155

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Appeal against decision not to register

156

• (1) This section applies where, on an application for a pension scheme to be registered, the Inland Revenue’s decision is not to register the pension scheme.

• (2) The scheme administrator may appeal against the decision.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) An appeal under this section against a decision must be brought within the period of 30 days beginning with the day on which the scheme administrator was notified of the decision.

• (6) On an appeal under this section that is notified to the tribunal, the tribunal must consider whether the pension scheme ought to have been registered by the Inland Revenue.

• (7) If the tribunal decides that the pension scheme ought not to have been registered by the Inland Revenue, the tribunal must dismiss the appeal.

• (8) If the tribunal decides that the pension scheme ought to have been registered by the Inland Revenue, the pension scheme is to be treated as having been registered on such date as the tribunal determines (but subject to any further appeal ...).

De-registration

De-registration

157

• (1) The Inland Revenue may withdraw the registration of a pension scheme.

• (2) If the Inland Revenue withdraws the registration of a pension scheme the Inland Revenue must notify the scheme administrator.

• (3) If there is no-one who is the scheme administrator, the Inland Revenue must instead notify any person or persons—

• (a) who has or have responsibility for the discharge of any obligation relating to the pension scheme under section 271(4) (continuation of liability where no scheme administrator), section 272 (trustees etc.) or section 273 (members), and

• (b) whom it is reasonably practicable for the Inland Revenue to identify.

• (4) The notification must state the date on and after which the pension scheme will not be a registered pension scheme.

Grounds for de-registration

158

• (1) The registration of a pension scheme may be withdrawn under section 157 only if it appears to the Inland Revenue—

• (za) that the pension scheme has not been established, or is not being maintained, wholly or mainly for the purpose of making payments falling within section 164(1)(a) or (b) (authorised payments of pensions and lump sums),

• (zb) that the person who is, or any of the persons who are, the scheme administrator is not a fit and proper person to be, as the case may be—

• (i) the scheme administrator, or

• (ii) one of the persons who are the scheme administrator,

• (a) that the amount of the scheme chargeable payments (see section 241) made by the pension scheme during any period of 12 months exceeds the de-registration threshold,

• (b) that the scheme administrator fails to pay a substantial amount of tax (or interest on tax) due from the scheme administrator by virtue of this Part,

• (c) that the scheme administrator fails to provide information required to be provided to the Inland Revenue by virtue of this Part or Part 1 of Schedule 36 to the Finance Act 2008 and the failure is significant,

• (d) that any information contained in the application to register the pension scheme or otherwise provided to the Inland Revenue is inaccurate in a material particular,

• (da) that the scheme administrator fails to produce any document required to be produced to an officer of Revenue and Customs by virtue of this Part or Part 1 of Schedule 36 to the Finance Act 2008,

• (db) that any document produced to an officer of Revenue and Customs by the scheme administrator contains a material inaccuracy in relation to which at least one of conditions A to C in subsections (7) to (10) is met,

• (e) that any declaration accompanying the application to register the pension scheme, or otherwise made to an officer of Revenue and Customs in connection with the pension scheme, is false in a material particular,

• (ea) that the scheme administrator has deliberately obstructed an officer of Revenue and Customs in the course of an inspection under section 159B or Part 2 of Schedule 36 to the Finance Act 2008 that has been approved by the tribunal, or

• (f) that there is no scheme administrator, or

• (g) that the pension scheme is an occupational pension scheme, and a sponsoring employer in relation to the scheme is a body corporate that has been dormant during a continuous period of one month that falls within the period of one year ending with the day on which the decision to withdraw registration is made, or

• (h) that the scheme is an unauthorised Master Trust scheme.

• (2) The amount of the scheme chargeable payments made by a pension scheme during any period of 12 months exceeds the de-registration threshold if the scheme chargeable payments percentage is 25% or more.

• (3) The scheme chargeable payments percentage is—

• (a) if only one scheme chargeable payment is made during the period of 12 months, the percentage of the pension fund used up on the occasion of that scheme chargeable payment, and

• (b) if two or more scheme chargeable payments are made during the period of 12 months, the aggregate of the percentages of the pension fund used up on the occasion of each of those scheme chargeable payments.

• (4) The percentage of the pension fund used up on the occasion of a scheme chargeable payment is—

$$SCPAA×100$where—SCP is the amount of the scheme chargeable payment, andAA is an amount equal to the aggregate of the amount of the sums and the market value of the assets held for the purposes of the pension scheme at the time when the scheme chargeable payment is made.$

• (5) A failure by a scheme administrator to provide information required to be provided to the Inland Revenue by or under this Part or Part 1 of Schedule 36 to the Finance Act 2008 is significant if—

• (a) the amount of information which the scheme administrator fails to provide is substantial, or

• (b) the failure to provide the information is likely to result in serious prejudice to the assessment or collection of tax.

• (6) Subsections (7) to (10) apply for the purposes of subsection (1)(db).

• (7) Condition A is that the inaccuracy is careless or deliberate.

• (8) An inaccuracy is careless if it is due to a failure by the scheme administrator to take reasonable care.

• (9) Condition B is that the scheme administrator knows of the inaccuracy at the time the document is produced to an officer of Revenue and Customs but does not inform such an officer at that time.

• (10) Condition C is that the scheme administrator—

• (a) discovers the inaccuracy some time later, and

• (b) fails to take reasonable steps to inform an officer of Revenue and Customs.

Appeal against decision to de-register

159

• (1) This section applies where the Inland Revenue decides to withdraw the registration of a pension scheme under section 157.

• (2) The scheme administrator, or any person notified under that section of the withdrawal of registration, may appeal against the decision.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) An appeal under this section against a decision must be brought within the period of 30 days beginning with the day on which the appellant was notified of the decision.

• (6) On an appeal that is notified to the tribunal, the tribunal must consider whether the registration of the pension scheme ought to have been withdrawn.

• (7) If the tribunal decides that the registration of the pension scheme ought to have been withdrawn, the tribunal must dismiss the appeal.

• (8) If the tribunal decides that the registration of the pension scheme ought not to have been withdrawn, the pension scheme is to be treated as having remained a registered pension scheme (but subject to any further appeal ...).

Chapter 3 — Payments by registered pension schemes

Introductory

Payments by registered pension schemes

160

• (1) The only payments which a registered pension scheme is authorised to make to or in respect of a person who is or has been a member of the pension scheme are those specified in section 164.

• (2) In this Part “unauthorised member payment” means—

• (a) a payment by a registered pension scheme to or in respect of a person who is or has been a member of the pension scheme which is not authorised by section 164, and

• (b) anything which is to be treated as an unauthorised payment to or in respect of a person who is or has been a member of the pension scheme under this Part.

• (3) The only payments which a registered pension scheme that is an occupational pension scheme is authorised to make to or in respect of a person who is or has been a sponsoring employer are those specified in section 175.

• (4) In this Part “unauthorised employer payment” means—

• (a) a payment by a registered pension scheme that is an occupational pension scheme, to or in respect of a person who is or has been a sponsoring employer, which is not authorised by section 175, and

• (b) anything which is to be treated as an unauthorised payment to a person who is or has been a sponsoring employer under section 181.

• (4A) If an unauthorised member payment or unauthorised employer payment made to or in respect of a person would have been greater but for a reduction made in respect of the whole, or any proportion, of the amount which the scheme administrator considers may be the amount of the liability to the scheme sanction charge in respect of it, it is to be regarded for the purposes of this Part as increased by the amount of the reduction.

• (4B) But if the amount, or that proportion of the amount, of that liability is in fact less than the amount of the reduction, a subsequent payment of an amount not exceeding the difference between that amount and the amount of the reduction made—

• (a) to or in respect of the same person, and

• (b) before the end of the period of two years beginning with the date on which the unauthorised member payment or unauthorised employer payment was made,

is not to be regarded for the purposes of this Part as an unauthorised member payment or unauthorised employer payment.

• (5) In this Part “unauthorised payment” means—

• (a) an unauthorised member payment, or

• (b) an unauthorised employer payment.

• (6) As well as section 157 (de-registration), the following provisions—

• (a) section 208 (unauthorised payments charge),

• (b) section 209 (unauthorised payments surcharge),

• (c) section 239 (scheme sanction charge), and

• (d) section 242 (de-registration charge),

specify consequences of making unauthorised payments.

• (7) Sections 182 to 185 contain provision about amounts that a registered pension scheme is not authorised to borrow.

• (7A) Sections 185A to 185I contain provision about the receipt of income and gains from taxable property.

• (8) As well as section 157, sections 239 and 242 specify consequences of unauthorised borrowing and the receipt of income and gains from taxable property.

• (9) Schedule 36 contains (in Parts 3 and 4) transitional provision about unauthorised payments.

Meaning of “payment” etc

161

• (1) This section applies for the interpretation of this Chapter.

• (2) “Payment” includes a transfer of assets and any other transfer of money’s worth.

• (3) Subsection (4) applies to a payment made or benefit provided under or in connection with an investment (including an insurance contract or annuity) acquired using sums or assets held for the purposes of a registered pension scheme.

• (4) The payment or benefit is to be treated as made or provided from sums or assets held for the purposes of the pension scheme, even if the pension scheme has been wound up since the investment was acquired.

• (5) A payment made by a registered pension scheme to or in respect of a person who—

• (a) is connected with a person who is or has been a member or sponsoring employer (or was connected with such a person at the date of the person's death), and

• (b) is not a person who is or has been a member or sponsoring employer,

is to be treated as made in respect of the person who is or has been a member or sponsoring employer.

• (6) Any asset held by a person connected with a person who is or has been a member or sponsoring employer (or who was connected with such a person at the date of the person's death) is to be treated as held for the benefit of the person who is or has been a member or sponsoring employer.

• (7) Any increase in the value of an asset held by, or reduction in the liability of, a person connected with a person who is or has been a member or sponsoring employer (or who was connected with such a person at the date of the person's death) is to be treated as an increase or reduction for the benefit of the person who is or has been a member or sponsoring employer.

• (8) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

Meaning of “loan”

162

• (1) This section applies for the interpretation of this Chapter.

• (2) “Loan” does not include the purchase of or subscription to debentures, debenture stock, loan stock, bonds, certificates of deposit or other instruments creating or acknowledging indebtedness which are—

• (a) listed or dealt in on a recognised stock exchange (within the meaning of section 1005 of ITA 2007), or

• (b) offered to the public.

• (3) A guarantee of a loan made to or in respect of a person who is or has been a member or sponsoring employer of a registered pension scheme , or to or in respect of a person who is connected with a person who is or has been a member or sponsoring employer of a registered pension scheme but is not such a person, is to be treated as a loan to or in respect of the person who is or has been a member or sponsoring employer of an amount equal to the amount guaranteed.

• (4) If a person who is or has been a member or sponsoring employer of a registered pension scheme or a person who is connected with a person who is or has been a member or sponsoring employer of a registered pension scheme but is not such a person—

• (a) is liable to pay a debt, the right to payment of which constitutes an asset held for the purposes of the pension scheme, but

• (b) is not required to pay it by the relevant date,

the debt is to be treated as a loan made by the pension scheme to the person who is or has been a member or sponsoring employer on that date.

• (5) The relevant date is the date by which a person at arm’s length from the pension scheme might be expected to be required to pay the debt.

• (6) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

Meaning of “borrowing” etc

163

• (1) This section applies for the interpretation of this Chapter.

• (2) Borrowing is borrowing by a registered pension scheme if the amount borrowed is to be repaid from sums or assets held for the purposes of the pension scheme.

• (3) A liability is a liability of a registered pension scheme if the liability is to be met from sums or assets held for the purposes of the pension scheme.

• (4) Borrowing by a registered pension scheme is in respect of an arrangement if it is properly attributable to the arrangement in accordance with the provisions of the pension scheme and any just and reasonable apportionment.

Authorised member payments

Authorised member payments

164

• (1) The only payments a registered pension scheme is authorised to make to or in respect of a person who is or has been a member of the pension scheme are—

• (a) pensions permitted by the pension rules or the pension death benefit rules to be paid to or in respect of a member (see sections 165 and 167),

• (b) lump sums permitted by the lump sum rule or the lump sum death benefit rule to be paid to or in respect of a member (see sections 166 and 168),

• (c) recognised transfers (see section 169),

• (d) scheme administration member payments (see section 171),

• (e) payments pursuant to a pension sharing order or provision, and

• (f) payments of a description prescribed by regulations made by the Board of Inland Revenue.

• (2) Regulations under subsection (1)(f) may—

• (a) provide that for the purposes of Part 9 of ITEPA 2003 all or part of a prescribed payment is to be treated as pension under a registered pension scheme, or as a lump sum of a prescribed description,

• (b) provide that all or part of a prescribed payment is subject to the short service refund lump sum charge... or the special lump sum death benefits charge,

• (c) provide that a prescribed event in relation to a prescribed payment is to be treated as a relevant benefit crystallisation event for the purposes of section 637Q or 637S of ITEPA 2003 (availability of individual’s lump sum allowance and lump sum and death benefit allowance),

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

and “prescribed” means prescribed in regulations under subsection (1)(f).

• (3) The Commissioners for Her Majesty's Revenue and Customs may by regulations make provision—

• (a) having the effect that the making of a prescribed authorised payment does not (directly or indirectly) result in an individual first flexibly accessing pension rights for the purposes of sections 227B to 227F,

• (b) having the effect that the making of a prescribed authorised payment is not a relevant withdrawal for the purposes of section 579CA of ITEPA 2003, and

• (c) having the effect that the making of a prescribed payment by a pension scheme that is not a registered pension scheme, where the payment would be an authorised payment if the scheme were a registered pension scheme, is not a relevant withdrawal for the purposes of section 576A of ITEPA 2003.

• (4) In subsection (3)—

• “authorised payment” means a payment specified in subsection (1), and

• “prescribed” means prescribed in regulations under subsection (3).

Pension rules

165

• (1) These are the rules relating to the payment of pensions by a registered pension scheme to a member of the pension scheme (“the pension rules”).

• Pension rule 1No payment of pension may be made before the day on which the member reaches normal minimum pension age, unless the ill-health condition was met immediately before the member became entitled to a pension under the pension scheme.

• Pension rule 2If the member dies before the end of the period of ten years beginning with the day on which the member became entitled to a scheme pension or an annuity, and if in the case of an annuity that day was before 6 April 2015, payment of the scheme pension or annuity may continue to be made (to any person) until the end of that period. If the member becomes entitled to an annuity on or after 6 April 2015 and the annuity is payable until the later of the member's death and the end of a term certain, payment of the annuity may continue to be made (to any person) until the end of that term. Except as provided by the preceding provisions of this rule, no payment of the member’s pension may be made after the member’s death.

• Pension rule 3No payment of pension other than a scheme pension may be made in respect of a defined benefits arrangement or a collective money purchase arrangement.

• Pension rule 4 No payment of pension other than—a scheme pension,a lifetime annuity, or drawdown pension may be made in respect of a money purchase arrangement that is not a collective money purchase arrangement; but a scheme pension may only be paid if the member had an opportunity to select a lifetime annuity instead.

• Pension rule 5The total amount of drawdown pension paid in each drawdown pension year from, or under a short-term annuity purchased using sums or assets out of, the member's drawdown pension fund in respect of a money purchase arrangement must not exceed 150% of the basis amount for the drawdown pension .

• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) In this Part “pension”, in relation to a registered pension scheme, includes—

• (a) an annuity, and

• (b) income withdrawal.

• (3) For the purposes of this Part, a person becomes entitled to a pension under a registered pension scheme—

• (a) in the case of income withdrawal under the pension scheme, whenever sums or assets held for the purposes of an arrangement under the pension scheme are designated as available for the payment of drawdown pension, and

• (b) in any other case, when the person first acquires an actual (rather than a prospective) right to receive the pension

and, for this purpose, the abatement of a scheme pension under a public service pension scheme is not to be taken to affect the right to receive it.

• (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) Part 1 of Schedule 28 gives the meaning of expressions used in the pension rules.

Lump sum rule

166

• (1) This is the rule relating to the payment of lump sums by a registered pension scheme to a member of the pension scheme (“the lump sum rule”).

Lump sum rule

No lump sum may be paid other than—

• (a) a pension commencement lump sum,

• (aa) a pension commencement excess lump sum,

• (b) a serious ill-health lump sum,

• (ba) an uncrystallised funds pension lump sum,

• (c) a short service refund lump sum,

• (d) a refund of excess contributions lump sum,

• (e) a trivial commutation lump sum , or

• (f) a winding-up lump sum, ...

• (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) For the purposes of this Part, a person becomes entitled to a lump sum under a registered pension scheme—

• (za) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (a) in the case of a pension commencement lump sum or a pension commencement excess lump sum, immediately before the person becomes entitled to the pension in connection with which it is paid (or, if the person dies before becoming entitled to the pension in connection with which it was anticipated it would be paid, immediately before death),

• (aa) in the case of an uncrystallised funds pension lump sum, immediately before it is paid, and

• (b) in any other case, when the person acquires an actual (rather than a prospective) right to receive the lump sum.

• (3) Part 1 of Schedule 29 gives the meaning of expressions used in the lump sum rule.

• (4) Schedule 36 contains (in Part 3) transitional provisions about lump sums.

• (5) The Commissioners for Her Majesty's Revenue and Customs may by regulations amend Part 1 of Schedule 29, or Part 3 of Schedule 36, in connection with cases involving a lump sum within subsection (6).

• (6) A lump sum is within this subsection if—

• (a) the sum is paid on or after 19 September 2013 and before 6 April 2015, or

• (b) the sum is paid before 19 September 2013, a contract for a lifetime annuity is entered into to provide the pension in connection with which the sum is paid, and on or after 19 March 2014 the contract is cancelled.

• (7) The provision that may be made under subsection (5) includes provision altering the effect of amendments made by the Finance Act 2014.

Pension death benefit rules

167

• (1) These are the rules relating to the payment of pension death benefits by a registered pension scheme in respect of a member of the pension scheme (“the pension death benefit rules”).

• Pension death benefit rule 1No payment of pension death benefit may be made otherwise than to a dependant, or nominee or successor, of the member.

• Pension death benefit rule 2No payment of pension death benefit other than a dependants' scheme pension may be made in respect of a defined benefits arrangement or a collective money purchase arrangement.

• Pension death benefit rule 3No payment of pension death benefit other than—a dependants' scheme pension,a dependants' annuity, ordependants’ drawdown pension,may be made to a dependant in respect of a money purchase arrangement that is not a collective money purchase arrangement; but a dependants' scheme pension may only be paid if the member or dependant had an opportunity to select a dependants' annuity instead.

• Pension death benefit rule 3ANo payment of pension death benefit, other than a nominees' annuity in respect of a money purchase arrangement or nominees' drawdown pension in respect of a money purchase arrangement, may be made to a nominee of the member.

• Pension death benefit rule 3BNo payment of pension death benefit, other than a successors' annuity in respect of a money purchase arrangement or successors' drawdown pension in respect of a money purchase arrangement, may be made to a successor of the member.

• Pension death benefit rule 4The total amount of dependants’ drawdown pension paid to a dependant in each drawdown pension year from, or under a dependants' short-term annuity purchased using sums or assets out of, the dependant's drawdown pension fund in respect of a money purchase arrangement must not exceed 150% of the basis amount for the drawdown pension year....

• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (1A) For the purposes of this Part, a person becomes entitled to dependants' income withdrawal, nominees' income withdrawal or successors' income withdrawal under a registered pension scheme whenever sums or assets held for the purposes of an arrangement under the pension scheme are designated as available for the payment of (as the case may be) dependants' drawdown pension, nominees' drawdown pension or successors' drawdown pension.

• (2) In this part “pension death benefit” means a pension payable on the death of the member (other than a member’s pension payable after the member’s death under pension rule 2: see section 165), or a pension payable in respect of the member on the subsequent death of a dependant, nominee or successor of the member.

• (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) Part 2 of Schedule 28 gives the meaning of expressions used in the pension death benefit rules.

Lump sum death benefit rule

168

• (1) This is the rule relating to the payment of lump sum death benefits by a registered pension scheme in respect of a member of the pension scheme (“the lump sum death benefit rule”).

Lump sum death benefit rule

No lump sum death benefit may be paid other than—

• (a) a defined benefits lump sum death benefit,

• (b) a pension protection lump sum death benefit,

• (c) an uncrystallised funds lump sum death benefit,

• (d) an annuity protection lump sum death benefit,

• (e) a drawdown pension fund lump sum death benefit,

• (ea) a flexi-access drawdown fund lump sum death benefit,

• (f) a charity lump sum death benefit , or

• (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (h) a trivial commutation lump sum death benefit, ...

• (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) In this Part “lump sum death benefit” means a lump sum payable on the death of the member , or a lump sum payable in respect of the member on the subsequent death of a dependant, nominee or successor of the member.

• (3) Part 2 of Schedule 29 gives the meaning of expressions used in the lump sum death benefit rule.

• (4) Schedule 36 contains (in Part 3) transitional provision about lump sum death benefits.

Recognised transfers

169

• (1) A “recognised transfer” is a transfer of sums or assets held for the purposes of, or representing accrued rights under, a registered pension scheme so as to become held for the purposes of, or to represent rights under—

• (a) another registered pension scheme, or

• (b) a qualifying recognised overseas pension scheme,

in connection with a member of that pension scheme.

• (1A) A transfer of sums or assets held for the purposes of, or representing accrued rights under, a registered pension scheme to an insurance company is to be treated as a recognised transfer if the sums or assets had been applied by the pension scheme towards the provision of a scheme pension or a dependants' scheme pension (but subject to regulations under subsections (1B) and (1C)).

• (1B) The Board of Inland Revenue may by regulations provide that, where any of the sums or assets transferred represent rights in respect of a scheme pension to which a member of a registered pension scheme has become entitled (“the original scheme pension”)—

• (a) the transfer is not a recognised transfer unless those sums and assets are, after the transfer, applied towards the provision of a scheme pension (a “new scheme pension”), and

• (b) if they are so applied, the new scheme pension is to be treated, to such extent as is prescribed by the regulations and for such of the purposes of this Part as are so prescribed, as if it were the original scheme pension.

• (1C) The Board of Inland Revenue may by regulations provide that, where any of the sums or assets transferred represent rights in respect of a dependants' scheme pension to which a dependant of a member of a registered pension scheme has become entitled in respect of the member (“the original dependants' scheme pension”)—

• (a) the transfer is not a recognised transfer unless those sums and assets are, after the transfer, applied towards the provision of a dependants' scheme pension (a “new dependants' scheme pension”), and

• (b) if they are so applied, the new dependants' scheme pension is to be treated, to such extent as is prescribed by the regulations and for such of the purposes of this Part as are so prescribed, as if it were the original dependants' scheme pension.

• (1D) The Board of Inland Revenue may by regulations provide that, where any of the sums or assets transferred represent—

• (a) a member's drawdown pension fund or dependant's drawdown pension fund, ... or

• (aa) a member's flexi-access drawdown fund or dependant's flexi-access drawdown fund, or

• (ab) a nominee's flexi-access drawdown fund, or

• (ac) a successor's flexi-access drawdown fund,

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

under an arrangement (“the old arrangement”), the transfer is not a recognised transfer unless all of those sums and assets become held under an arrangement under which no other sums or assets are held (“the new arrangement”).

• (1E) If regulations so provide they may make in relation to cases in which the sums and assets become so held provision as to the treatment for the purposes of any provision of this Part of—

• (a) the sums and assets transferred, and

• (b) the new arrangement,

including provision for treating the sums and assets transferred as remaining, to such extent as is prescribed by the regulations and for such of the purposes of this Part as are so prescribed, sums and assets held under the old arrangement.

• (1F) The Commissioners for His Majesty’s Revenue and Customs may by regulations make provision as to the treatment for the purposes of any provision of this Part of—

• (a) sums or assets that—

• (i) were transferred in accordance with section 36 of the Pension Schemes Act 2021 and regulations made under that section (collective money purchase scheme pursuing continuity option 1: discharge of liabilities and winding up (Great Britain)),

• (ii) were transferred in accordance with section 87 of the Pension Schemes Act 2021 and regulations made under that section (collective money purchase scheme pursuing continuity option 1: discharge of liabilities and winding up (Northern Ireland)), or

• (iii) are derived from sums or assets within sub-paragraph (i) or (ii);

• (b) any pension or other benefits provided from sums or assets within paragraph (a).

• (1G) The provision that may be made under subsection (1F) includes provision for treating sums or assets within paragraph (a) of that subsection as remaining, to such extent as is prescribed by the regulations and for such of the purposes of this Part as are so prescribed, held for the purposes of the collective money purchase arrangement under the pension scheme from which they were transferred.

• (2) For the purposes of this Part a recognised overseas pension scheme is a qualifying recognised overseas pension scheme if—

• (a) the scheme manager has given to the Inland Revenue notification that it is a recognised overseas pension scheme and has provided any such evidence that it is a recognised overseas pension scheme as the Inland Revenue may require,

• (b) the scheme manager has undertaken to the Inland Revenue to inform the Inland Revenue if it ceases to be a recognised overseas pension scheme,

• (ba) the scheme manager has confirmed to an officer of Revenue and Customs that the scheme manager understands the scheme manager's potential liability to overseas transfer charge and has undertaken to such an officer to operate the charge including by meeting the scheme manager's liabilities to the charge,

• (c) the scheme manager has undertaken to the Inland Revenue to comply with any requirements imposed under subsection (4), and

• (d) the recognised overseas pension scheme is not excluded from being a qualifying recognised overseas pension scheme by subsection (5).

• (2A) Regulations may make provision as to—

• (a) information that is to be included in, or is to accompany, a notification under subsection (2)(a);

• (b) the way and form in which such a notification, or any required information or evidence, is to be given or provided.

• (3) In this Part “scheme manager”, in relation to a pension scheme, means the person or persons administering, or responsible for the management of, the pension scheme.

• (4) Regulations may require the scheme manager of a QROPS or former QROPS to—

• (a) give the Commissioners information of a prescribed description,

• (b) give the Commissioners such evidence as they may require of a prescribed matter,

• (ba) give information of a prescribed description to the scheme manager of a QROPS or former QROPS,

• (bb) give information of a prescribed description to the scheme administrator of a registered pension scheme,

• (bc) give information of a prescribed description to a member, or former member, of the QROPS or former QROPS, and

• (c) give a prescribed authority, in prescribed circumstances, information of a prescribed description.

• (4ZA) Regulations may require a member, or former member, of a QROPS or former QROPS to give information of a prescribed description to the scheme manager of a QROPS or former QROPS.

• (4A) Regulations under subsection (4) or (4ZA) may make provision as to—

• (a) the way and form in which information or evidence is to be given, and

• (b) the times or intervals at which information or evidence is to be given.

• (4B) The regulations may apply any provision of Part 7 of Schedule 36 to FA 2008 (penalties), with or without modifications, in relation to requirements imposed under the regulations on a former QROPS.

• (4C) Provision under subsection (2A)(b) or (4A)(a) may, in particular, provide for use of a way or form specified by the Commissioners.

• (5) A recognised overseas pension scheme is excluded from being a qualifying recognised overseas pension scheme by this subsection if the Commissioners have decided that—

• (a) any of the following conditions is met in relation to the scheme—

• (i) there has been a failure to comply with a relevant requirement and the failure is significant,

• (ii) any information given pursuant to a relevant requirement is inaccurate in a material respect,

• (iii) any declaration given pursuant to a relevant requirement is false in a material respect,

• (iv) there is no scheme manager, and

• (b) by reason of that condition being met it is not appropriate that transfers of sums or assets held for the purposes of, or representing accrued rights under, registered pension schemes so as to become held for the purposes of, or to represent rights under, the recognised overseas pension scheme should be recognised transfers,

and has notified the person or persons appearing to be the scheme manager of that decision (but subject to subsection (7) and section 170).

• (6) A failure to comply with a requirement is significant if—

• (a) it is a failure to give information or evidence that is (or may be) of significance, or

• (b) there are reasonable grounds for believing that the failure prejudices (or might prejudice) the assessment or collection of tax by the Commissioners.

• (7) The Inland Revenue—

• (a) may at any time after a recognised overseas pension scheme becomes excluded from being a qualifying recognised overseas pension scheme decide that the pension scheme is to cease to be so excluded, and

• (b) must notify the scheme manager of the decision.

• (7A) Regulations may, in a case where—

• (a) any of the sums and assets transferred by a relevant overseas transfer represent rights in respect of a pension to which a person has become entitled under the transferring scheme (“the original pension”), and

• (b) those sums and assets are, after the transfer, applied towards the provision of a pension under the other scheme (“the new pension”),

provide that the new pension is to be treated, to such extent as is prescribed and for such of the purposes of this Part as are prescribed, as if it were the original pension.