Finance Act 2014

$$X – ( Y × Z )$where—X is the appropriate amount,Y is 5% of X, andZ is the number of tax years beginning after 5 April 2014 but ending on or before the transfer day.$

(If the formula gives a negative amount, it is to be taken to be nil.)

• (8) But if the individual's relevant amount would be reduced (or further reduced) to £1,250,000 or less, sub-paragraph (2) is not to apply at all in the case of the individual on and after the transfer day.

• (9) In sub-paragraphs (6) to (8) “appropriate amount” and “transfer day”, in relation to a pension debit, have the same meaning as in section 29 of WRPA 1999 or Article 26 of WRP(NI)O 1999 (as the case may be).

Amount A (pre-6 April 2006 pensions in payment)

2

• (1) To determine amount A—

• (a) apply sub-paragraph (2) if a benefit crystallisation event has occurred in relation to the individual during the period comprising the tax year 2006-07 and all subsequent tax years up to (and including) the tax year 2013-14;

• (b) otherwise, apply sub-paragraph (6).

• (2) If this sub-paragraph is to be applied, amount A is—

$$25 × ARP × 1,500,000 SLT$where—ARP is (subject to sub-paragraph (3)) an amount equal to—the annual rate at which any relevant existing pension was payable to the individual at the time immediately before the benefit crystallisation event occurred, orif more than one relevant existing pension was payable to the individual at that time, the sum of the annual rates at which each of the relevant existing pensions was so payable, andSLT is an amount equal to what the standard lifetime allowance was at the time the benefit crystallisation event occurred.$

• (3) Paragraph 20(4) of Schedule 36 to FA 2004 applies for the purposes of the definition of “ARP” in sub-paragraph (2) (and, for this purpose, in paragraph 20(4) any reference to “the time” is to be read as a reference to the time immediately before the benefit crystallisation event occurred).

• (4) If the time immediately before the benefit crystallisation event occurred falls before 6 April 2011, in sub-paragraph (3) references to paragraph 20(4) are to be read as references to that provision as it stood at the time immediately before the benefit crystallisation event occurred.

• (5) If more than one benefit crystallisation event has occurred, in sub-paragraphs (2) to (4) references to the benefit crystallisation event are to be read as references to the first benefit crystallisation event.

• (6) If this sub-paragraph is to be applied, amount A is—

$$25 × ARP$where ARP is (subject to sub-paragraph (7)) an amount equal to—the annual rate at which any relevant existing pension is payable to the individual at the end of 5 April 2014, orif more than one relevant existing pension is payable to the individual at the end of 5 April 2014, the sum of the annual rates at which each of the relevant existing pensions is so payable.$

• (7) Paragraph 20(4) of Schedule 36 to FA 2004 applies for the purposes of the definition of “ARP” in sub-paragraph (6) (and, for this purpose, in paragraph 20(4) any reference to “the time” is to be read as a reference to 5 April 2014).

• (8) In this paragraph “relevant existing pension” means (subject to sub-paragraph (9)) a pension, annuity or right—

• (a) which was, at the end of 5 April 2006, a “relevant existing pension” as defined by paragraph 10(2) and (3) of Schedule 36 to FA 2004, and

• (b) the payment of which the individual had, at the end of 5 April 2006, an actual (rather than a prospective) right to.

• (9) If—

• (a) before 6 April 2014, there was a recognised transfer of sums or assets representing a relevant existing pension, and

• (b) those sums or assets were, after the transfer, applied towards the provision of a scheme pension (“the new scheme pension”),

the new scheme pension is also to be a “relevant existing pension” (including for the purposes of this sub-paragraph).

Amount B (pre-6 April 2014 benefit crystallisation events)

3

• (1) To determine amount B—

• (a) identify each benefit crystallisation event that has occurred in relation to the individual during the period comprising the tax year 2006-07 and all subsequent tax years up to (and including) the tax year 2013-14,

• (b) determine the amount which was crystallised by each of those benefit crystallisation events (applying paragraph 14 of Schedule 34 to FA 2004 if relevant), and

• (c) multiply each crystallised amount by the following fraction—

$$1,500,000 SLT$where SLT is an amount equal to what the standard lifetime allowance was at the time the benefit crystallisation event in question occurred.$

• (2) Amount B is the sum of the crystallised amounts determined under sub-paragraph (1)(b) as adjusted under sub-paragraph (1)(c).

Amount C (uncrystallised rights at end of 5 April 2014 under registered pension schemes)

4

Amount C is the total value of the individual's uncrystallised rights at the end of 5 April 2014 under arrangements relating to the individual under registered pension schemes of which the individual is a member as determined in accordance with section 212 of FA 2004.

Amount D (uncrystallised rights at end of 5 April 2014 under relieved non-UK pension schemes)

5

• (1) To determine amount D—

• (a) identify each relieved non-UK pension scheme of which the individual is a relieved member at the end of 5 April 2014, and

• (b) in relation to each such scheme—

• (i) assume that a benefit crystallisation event occurs in relation to the individual at the end of 5 April 2014, and

• (ii) in accordance with paragraph 14 of Schedule 34 to FA 2004, determine what the untested portion of the relevant relieved amount would be immediately before the assumed benefit crystallisation event.

• (2) Amount D is the sum of the untested portions determined under sub-paragraph (1)(b)(ii).

Interpretation

6

• (1) Expressions used in this Part of this Schedule and Part 4 of FA 2004 have the same meaning in this Part as in that Part.

• (2) In particular, references to a relieved non-UK pension scheme or a relieved member of such a scheme are to be read in accordance with paragraphs 13(3) and (4) and 18 of Schedule 34 to FA 2004.

PART 2 — Regulations

7

• (1) The Commissioners for Her Majesty's Revenue and Customs may by regulations amend Part 1 of this Schedule.

• (2) Regulations under this paragraph may (for example) add to the cases in which paragraph 1(2) is to apply.

• (3) Regulations under this paragraph must not increase any person's liability to tax.

• (4) Regulations under this paragraph may include provision having effect in relation to a time before the regulations are made; but the time must be no earlier than 6 April 2014.

8

• (1) The Commissioners for Her Majesty's Revenue and Customs may by regulations make provision specifying how any notice required to be given to an officer of Revenue and Customs under Part 1 of this Schedule is to be given.

• (2) In sub-paragraph (1) the reference to Part 1 of this Schedule is to that Part as amended from time to time by regulations under paragraph 7.

9

• (1) Regulations under paragraph 7 or 8 may include supplementary or incidental provision.

• (2) The powers to make regulations under paragraphs 7 and 8 are exercisable by statutory instrument.

• (3) A statutory instrument containing regulations under paragraph 7 or 8 is subject to annulment in pursuance of a resolution of the House of Commons.

PART 3 — Other provision

Amendment of section 219(5A) of FA 2004

10

• (1) In section 219 of FA 2004 (availability of individual's lifetime allowance) in subsection (5A) after “effect” insert “ where the previous benefit crystallisation event occurred before 6 April 2014 ”.

• (2) The amendment made by this paragraph is treated as having come into force on 6 April 2014.

Amendment of section 98 of TMA 1970

11

• (1) Column 2 of the Table at the end of section 98 of TMA 1970 (special returns: penalties) is amended as follows.

• (2) After the entry for section 228 of TIOPA 2010 insert—

Regulations under paragraph 16 of Schedule 18 to the Finance Act 2011.

• (3) After the entry for regulations under section 61(5) of FA 2012 insert—

Regulations under paragraph 3 of Schedule 22 to the Finance Act 2013.
Regulations under paragraph 8 of Schedule 6 to the Finance Act 2014.

SCHEDULE 7

Introduction

1

Part 4 of FA 2004 (pension schemes etc) is amended as follows.

Registration of pension schemes

2

• (1) Section 153 (applications for registration) is amended as follows.

• (2) In subsection (4) for “On” substitute “ Following ”.

• (3) In subsection (5) for paragraphs (a) and (b) substitute—

(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.

• (4) After subsection (5) insert—

(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).

3

After section 153 insert—

(153A) (1) This section applies where an application for a pension scheme to be registered is made. (2) An officer of Revenue and Customs may by notice (an “information notice”) require the scheme administrator or any other person— (a) to provide the officer with any information, or (b) to produce a document to the officer, if the officer reasonably requires the information or document in connection with the application (including any declaration accompanying it). (3) Paragraphs 6(2), 7, 8, 15, 16, 18 to 20, 23 to 27, 42 and 43 of Schedule 36 to the Finance Act 2008 (information notices etc) apply in relation to information notices under this section as they apply in relation to information notices under that Schedule. (4) Where an information notice under this section is given to a person other than the scheme administrator, an officer of Revenue and Customs must give a copy of the notice to the scheme administrator. (5) A person, other than the scheme administrator, who is given an information notice under this section may appeal against the notice or any requirement in the notice. (6) Paragraph 32 of Schedule 36 to the Finance Act 2008 (procedures for appeals against information notices) applies for the purposes of an appeal under subsection (5) as it applies for the purposes of an appeal under Part 5 of that Schedule. (153B) (1) This section applies where an application for a pension scheme to be registered is made. (2) An officer of Revenue and Customs may— (a) enter any business premises of the scheme administrator or any other person, and (b) inspect documents that are on the premises, if the officer reasonably requires to inspect the documents in connection with the application (including any declaration accompanying it). (3) In subsection (2)(a) “business premises” has the meaning given by paragraph 10(3) of Schedule 36 to the Finance Act 2008 (power to inspect business premises etc). (4) Paragraphs 10(2), 12, 15 and 16 of Schedule 36 to the Finance Act 2008 apply in relation to the power of inspection conferred by this section as they apply in relation to the power of inspection conferred by paragraph 10 of that Schedule. (5) An officer of Revenue and Customs may not inspect a document under this section if or to the extent that, by virtue of a provision of Part 4 of Schedule 36 to the Finance Act 2008 (restrictions on powers) applied by section 153A(3), an information notice under section 153A given at the time of the inspection to the occupier of the premises could not require the occupier to produce the document. (6) An officer of Revenue and Customs may ask the tribunal to approve an inspection under this section. (7) Paragraph 13(1A), (2) and (3) of Schedule 36 to the Finance Act 2008 (approval of tribunal for inspections) applies in relation to an application under subsection (6) as it applies in relation to an application under paragraph 13 of that Schedule in relation to an inspection under paragraph 10 of that Schedule. (153C) (1) This section applies where a person other than the scheme administrator— (a) fails to comply with an information notice under section 153A, or (b) deliberately obstructs an officer of Revenue and Customs in the course of an inspection under section 153B that has been approved by the tribunal. (2) The reference in subsection (1)(a) to a person who fails to comply with an information notice includes a person who conceals, destroys or otherwise disposes of, or arranges 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). (3) Paragraphs 39(2), 40 and 44 to 49 of Schedule 36 to the Finance Act 2008 (penalties for failure to comply with information notice etc) apply in relation to the failure or obstruction as they apply in relation to a failure or obstruction mentioned in paragraph 39(1) of that Schedule. (153D) (1) This section applies where— (a) an application under section 153 contains information which is inaccurate, (b) the inaccuracy is material, and (c) condition A, B or C is met. (2) Condition A is that the inaccuracy is careless or deliberate. (3) An inaccuracy is careless if it is due to a failure by the scheme administrator to take reasonable care. (4) Condition B is that the scheme administrator knows of the inaccuracy at the time the application is made but does not inform an officer of Revenue and Customs at that time. (5) 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. (6) The scheme administrator is liable to a penalty not exceeding the maximum penalty for which the scheme administrator could have been liable under paragraph 40A of Schedule 36 to the Finance Act 2008 (penalties for inaccurate information and documents) had that paragraph applied in relation to the inaccuracy. (7) Where the information contains more than one material inaccuracy, a penalty is payable for each inaccuracy. (8) Paragraphs 46 to 49 of Schedule 36 to the Finance Act 2008 (assessment of penalties etc) apply in relation to a penalty under this section as they apply in relation to a penalty under paragraph 40A of that Schedule. (153E) (1) This section applies where— (a) in complying with an information notice under section 153A, a person provides inaccurate information or produces a document that contains an inaccuracy, and (b) the inaccuracy is material. (2) Paragraphs 40A and 46 to 49 of Schedule 36 to the Finance Act 2008 (penalties for inaccurate information and documents) apply in relation to the inaccuracy as they apply in relation to an inaccuracy connected with an information notice under that Schedule. (153F) (1) This section applies where— (a) a declaration accompanying an application under section 153 is false, and (b) at least one of conditions A to C in section 153D is met (reading references to an inaccuracy as references to a falsehood and references to the scheme administrator as references to the person who made the declaration). (2) The person who made the declaration is liable to a penalty not exceeding the maximum penalty for which the person could have been liable under paragraph 40A of Schedule 36 to the Finance Act 2008 (penalties for inaccurate information and documents) had that paragraph applied in relation to the falsehood. (3) Where the declaration contains more than one falsehood, a penalty is payable in relation to each falsehood. (4) Paragraphs 46 to 49 of Schedule 36 to the Finance Act 2008 (assessment of penalties etc) apply in relation to a penalty under this section as they apply in relation to a penalty under paragraph 40A of that Schedule.

4

After section 156 insert—

(156A) (1) This section applies where— (a) an application for a pension scheme to be registered is made, but (b) the scheme administrator is not notified under section 153(6) within the period of 6 months after the day on which the application is made. (2) The scheme administrator may appeal to the tribunal as if, at the end of that period of 6 months, the scheme administrator had been notified under section 153(6) of a decision not to register the scheme; and section 156(5) to (8) applies accordingly.

5

• (1) The amendments made by paragraphs 2 to 4 are treated as having come into force on 20 March 2014 and have effect in relation to applications made on or after that date.

• (2) In relation to an application made before 1 September 2014, section 153(5) of FA 2004 (as amended by paragraph 2(3)) has effect with the omission of paragraph (g).

De-registration of pension schemes

6

• (1) Section 158 (grounds for de-registration) is amended as follows.

• (2) In subsection (1)—

• (a) before paragraph (a) insert—

(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),

,

• (b) in paragraph (d) for “incorrect” substitute “ inaccurate ”,

• (c) after paragraph (d) insert—

(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,”, and

• (d) for paragraph (e) substitute—

(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 Part 2 of Schedule 36 to the Finance Act 2008 that has been approved by the tribunal, or

.

• (3) In subsection (1) (as amended by sub-paragraph (2) above)—

• (a) after paragraph (za) insert—

(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,

, and

• (b) in paragraph (ea) after “under” insert “ section 159B or ”.

• (4) After subsection (5) insert—

(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.

7

In Chapter 2, after section 159 insert—

(159A) (1) An officer of Revenue and Customs may by notice (an “information notice”) require the scheme administrator of a registered pension scheme or any other person— (a) to provide the officer with any information, or (b) to produce a document to the officer, if the officer reasonably requires the information or document for the purpose of considering whether the person who is, or any of the persons who are, the scheme administrator is a fit and proper person to be the scheme administrator or one of those persons (as the case may be). (2) Paragraphs 6(2), 7, 8, 15, 16, 18 to 20, 23 to 27, 42 and 43 of Schedule 36 to the Finance Act 2008 (information notices etc) apply in relation to information notices under this section as they apply in relation to information notices under that Schedule. (3) Where an information notice under this section is given to a person other than the scheme administrator, an officer of Revenue and Customs must give a copy of the notice to the scheme administrator. (4) A person who is given an information notice under this section may appeal against the notice or any requirement in the notice. (5) Paragraph 32 of Schedule 36 to the Finance Act 2008 (procedures for appeals against information notices) applies for the purposes of an appeal under subsection (4) as it applies for the purposes of an appeal under Part 5 of that Schedule. (159B) (1) An officer of Revenue and Customs may— (a) enter any business premises of the scheme administrator of a registered pension scheme or of any other person, and (b) inspect documents that are on the premises, if the officer reasonably requires to inspect the documents for the purpose of considering whether the person who is, or any of the persons who are, the scheme administrator is a fit and proper person to be the scheme administrator or one of those persons (as the case may be). (2) In subsection (1)(a) “business premises” has the meaning given by paragraph 10(3) of Schedule 36 to the Finance Act 2008 (power to inspect business premises etc). (3) Paragraphs 10(2), 12, 15 and 16 of Schedule 36 to the Finance Act 2008 apply in relation to the power of inspection conferred by this section as they apply in relation to the power of inspection conferred by paragraph 10 of that Schedule. (4) An officer of Revenue and Customs may not inspect a document under this section if or to the extent that, by virtue of a provision of Part 4 of Schedule 36 to the Finance Act 2008 (restrictions on powers) applied by section 159A(2), an information notice under section 159A given at the time of the inspection to the occupier of the premises could not require the occupier to produce the document. (5) An officer of Revenue and Customs may ask the tribunal to approve an inspection under this section. (6) Paragraph 13(1A), (2) and (3) of Schedule 36 to the Finance Act 2008 (approval of tribunal for inspections) applies in relation to an application under subsection (5) as it applies in relation to an application under paragraph 13 of that Schedule in relation to an inspection under paragraph 10 of that Schedule. (159C) (1) This section applies where a person— (a) fails to comply with an information notice under section 159A, or (b) deliberately obstructs an officer of Revenue and Customs in the course of an inspection under section 159B that has been approved by the tribunal. (2) The reference in subsection (1)(a) to a person who fails to comply with an information notice includes a person who conceals, destroys or otherwise disposes of, or arranges 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 159A(2). (3) Paragraphs 39(2), 40 and 44 to 49 of Schedule 36 to the Finance Act 2008 (penalties for failure to comply with information notice etc) apply in relation to the failure or obstruction as they apply in relation to a failure or obstruction mentioned in paragraph 39(1) of that Schedule. (159D) (1) This section applies where— (a) in complying with an information notice under section 159A, a person provides inaccurate information or produces a document that contains an inaccuracy, and (b) the inaccuracy is material. (2) Paragraphs 40A and 46 to 49 of Schedule 36 to the Finance Act 2008 (penalties for inaccurate information and documents) apply in relation to the inaccuracy as they apply in relation to an inaccuracy connected with an information notice under that Schedule.

8

• (1) The amendments made by paragraphs 6 and 7 have effect in relation to pension schemes whenever registered (including schemes registered by virtue of paragraph 1 of Schedule 36 to FA 2004 (deemed registration of existing schemes)).

• (2) The amendments made by paragraph 6(2) and (4) are treated as having come into force on 20 March 2014.

• (3) The amendments made by paragraphs 6(3) and 7 come into force on 1 September 2014 or, if later, the day after the day on which this Act is passed.

Declarations required from person who is to be a scheme administrator

9

• (1) In section 270 (meaning of “scheme administrator”) in subsection (2)—

• (a) after paragraph (a) omit “and”, and

• (b) after paragraph (b) insert

, and (c) has made to an officer of Revenue and Customs any other declarations which are reasonably required by Her Majesty's Revenue and Customs.

• (2) The amendments made by this paragraph have effect in relation to appointments on or after 1 September 2014.

Payments by registered pension schemes: surrender

10

• (1) Section 172A (payments by registered pension schemes: surrender) is amended as follows.

• (2) In subsection (5) omit paragraph (d).

• (3) After subsection (5) insert—

(5A) Subsection (5)(b) applies only if the entitlement is held (or is to be held) by the dependant under an arrangement under the pension scheme relating to the member or dependant.

11

In section 207 (authorised surplus payments charge) after subsection (6) insert—

(6A) Subsection (1) does not apply to an authorised surplus payment to the extent that the payment is funded (directly or indirectly) by a surrender of (or an agreement to surrender) benefits or rights which results in the registered pension scheme being treated as making an unauthorised payment under section 172A. (6B) Terms used in subsection (6A) which are defined in section 172A have the same meaning as they have in that section.

12

The amendments made by paragraphs 10 and 11 have effect in relation to surrenders (or agreements to surrender) made on or after 20 March 2014.

Orders for money etc to be restored to pension schemes

13

• (1) Section 188 (relief for members' contributions) is amended as follows.

• (2) In subsection (2) after “(3)” insert “ or (3A) ”.

• (3) After subsection (3) insert—

(3A) This subsection applies to a contribution if the contribution results from the transfer of property or money, or the payment of a sum, towards the pension scheme pursuant to a relevant order in a case where— (a) section 266A (members' liability in respect of unauthorised member payments) applies, and (b) relief is claimed under that section in respect of the liability mentioned in subsection (1)(a) of that section. (3B) In the case of a contribution which is greater than UMP (see section 266A(5)), subsection (3A) does not apply to the contribution so far as it is greater than UMP. (3C) In subsection (3A) “relevant order” means an order under any of the following— (a) section 16(1), 19(4) or 21(2)(a) of the Pensions Act 2004 (orders for money etc to be restored to pension schemes), or (b) Article 12(1), 15(4) or 17(2)(a) of the Pensions (Northern Ireland) Order 2005 (corresponding provision for Northern Ireland).

14

• (1) Section 266A (member's liability) is amended as follows.

• (2) In subsection (1)(b) for the words from “an order” to “Regulator)” substitute “ a relevant order ”.

• (3) In subsection (5), in the definition of “ASO”—

• (a) before the first “order” insert “ relevant ”, and

• (b) for the words from the second “order” to “2005” substitute “ relevant order ”.

• (4) After subsection (6) insert—

(6A) In this section “relevant order” means an order under any of the following— (a) section 16(1), 19(4) or 21(2)(a) of the Pensions Act 2004 (orders for money etc to be restored to pension schemes), or (b) Article 12(1), 15(4) or 17(2)(a) of the Pensions (Northern Ireland) Order 2005 (corresponding provision for Northern Ireland).

15

• (1) Section 266B (scheme's liability) is amended as follows.

• (2) In subsection (1)(b) for the words from “an order” to “Regulator)” substitute “ a relevant order ”.

• (3) In subsection (3), in the definition of “ASO”—

• (a) before the first “order” insert “ relevant ”, and

• (b) for the words from the second “order” to “2005” substitute “ relevant order ”.

• (4) After subsection (4) insert—

(5) In this section “relevant order” means an order under any of the following— (a) section 16(1), 19(4) or 21(2)(a) of the Pensions Act 2004 (orders for money etc to be restored to pension schemes), or (b) Article 12(1), 15(4) or 17(2)(a) of the Pensions (Northern Ireland) Order 2005 (corresponding provision for Northern Ireland).

16

The amendments made by paragraphs 13 to 15 have effect in relation to orders made on or after 1 September 2014.

Liabilities of trustees appointed by Pensions Regulator etc

17

In section 255 (assessments under Part) in subsection (1) after paragraph (e) insert—

(ea) liability under section 272C (former scheme administrator to retain liability in cases involving independent trustees etc),

.

18

In section 272 (trustees etc liable as scheme administrator) in subsection (4) after “applying in relation to the pension scheme” insert “ or by reason of section 272C(7) applying in relation to a liability ”.

19

After section 272 insert—

(272A) (1) This section applies in relation to a person (“P”) who is an independent trustee of a registered pension scheme. (2) For the purposes of this section and section 272B an “independent trustee” is a trustee of a pension scheme— (a) who is appointed by, or otherwise pursuant to, an order made— (i) by the Pensions Regulator under section 7 of the Pensions Act 1995 or Article 7 of the Pensions (Northern Ireland) Order 1995 (appointment of trustees by the Pensions Regulator), or (ii) by a court on an application made by the Pensions Regulator, and (b) who is not a trustee of the pension scheme at any time before— (i) the day on which the trustee's appointment as mentioned in paragraph (a) takes effect, or (ii) if the trustee is appointed as mentioned in paragraph (a) on more than one occasion, the day on which the first appointment takes effect. (3) In this section “the relevant day” means— (a) the day on which P's appointment as trustee of the pension scheme as mentioned in subsection (2)(a) takes effect, or (b) if P is appointed as trustee of the pension scheme as mentioned in subsection (2)(a) on more than one occasion, the day on which P's first appointment takes effect. (4) If P is, or is one of the persons who are, the scheme administrator, P does not assume any liability falling within subsection (7) which P would otherwise assume (including by reason of section 272C(3) or (4)). (5) Subsection (4) does not apply if P is, or is one of the persons who are, the scheme administrator at any time before the relevant day. (6) In relation to any liability falling within subsection (7), in section 272(4) references to trustees or to persons who control the management of the pension scheme do not include P. (7) The liabilities falling within this subsection are— (a) liabilities for the following in respect of payments made (or treated as having been made) by the pension scheme on or before the relevant day— (i) the short service refund lump sum charge; (ii) the serious ill-health lump sum charge; (iii) the special lump sum death benefits charge; (iv) the authorised surplus payments charge; (v) the scheme sanction charge in respect of scheme chargeable payments falling within section 241(1)(a) or (b); (b) liabilities for the lifetime allowance charge in respect of benefit crystallisation events occurring on or before the relevant day; (c) liabilities for the scheme sanction charge in respect of scheme chargeable payments treated under section 185A or 185F as having been made by the pension scheme in tax years earlier than the one in which the relevant day falls; (d) any liability for the scheme sanction charge in respect of the relevant fraction of any scheme chargeable payment treated under section 185A as having been made by the pension scheme in the tax year in which the relevant day falls; (e) where the pension scheme is treated under section 185F as having made a scheme chargeable payment in the tax year in which the relevant day falls and there is a relevant net gain, any liability for the scheme sanction charge in respect of the relevant amount; (f) any liability to pay interest in respect of a liability mentioned in paragraphs (a) to (e) arising at any time. (8) For the purposes of subsection (7)(d) “the relevant fraction” is— $$A B$where—A is the number of days in the tax year up to (and including) the relevant day, andB is the number of days in the tax year.$ (9) For the purposes of subsection (7)(e)— (a) there is a “relevant net gain” if— (i) the total amount of any gains treated under section 185F as accruing in the tax year on or before the relevant day, exceeds (ii) the total amount of any losses treated under section 185F as so accruing, and (b) “the relevant amount” is— (i) the scheme chargeable payment, or (ii) if that payment is greater than the excess of gains over losses mentioned in paragraph (a), the amount of that excess. (10) Subsection (11) applies if— (a) apart from that subsection, losses in relation to which section 185G(10) applies would be included in the total amount mentioned in subsection (9)(a)(ii), and (b) the losses exceed the gains— (i) which are included in the total amount mentioned in subsection (9)(a)(i), and (ii) from which the losses can be deducted in accordance with section 185G(10). (11) The losses are not to be included in the total amount mentioned in subsection (9)(a)(ii) so far as they exceed the gains. (272B) (1) This section applies in relation to a person (“Q”) who is, or is one of the persons who are, the scheme administrator of a registered pension scheme where Q's appointment as such takes effect at a time when the pension scheme has one or more independent trustees. (2) Q does not assume any liability falling within section 272A(7) which Q would otherwise assume. (3) In relation to any liability falling within section 272A(7), in section 272(4) references to persons who control the management of the pension scheme do not include Q. (4) Subsections (2) and (3) do not apply if Q is, or is one of the persons who are, the scheme administrator at any time before the relevant day. (5) In this section, and in section 272A as it applies for the purposes of this section, “the relevant day” means the first day on which the pension scheme has an independent trustee (whether or not there are days between that day and the day on which Q's appointment takes effect on which the pension scheme has no independent trustees). (272C) (1) This section applies in relation to a liability which, by reason of section 272A(4), is not assumed by P (in which case “the relevant day” is to be read in accordance with section 272A(3)). (2) This section also applies in relation to a liability which, by reason of section 272B(2), is not assumed by Q (in which case “the relevant day” is to be read in accordance with section 272B(5)). (3) The liability is to be retained or assumed by the person who is, or the persons who are, the scheme administrator immediately before the relevant day (unless dead or having ceased to exist). (4) If there is no scheme administrator immediately before the relevant day, the liability is to be retained or assumed by the person who was, or the persons who were, the scheme administrator when there last was a scheme administrator before the relevant day (unless dead or having ceased to exist). (5) Nothing in section 271 prevents a person from having (and continuing to have) the liability by reason of subsection (3) or (4). (6) Subsection (7) applies if— (a) no-one has the liability by reason of subsection (3) or (4), (b) no-one who has the liability by reason of subsection (3) or (4) can be traced, or (c) the person who has, or all the persons who have, the liability by reason of subsection (3) or (4) are in serious default (as determined in accordance with section 272(6)). (7) The liability is to be assumed by the person or persons determined in accordance with section 272(4). (8) Section 272(5) applies in relation to a person who assumes the liability by reason of subsection (7) as it applies in relation to a person who assumes a liability by reason of section 272. (9) Nothing in this section prevents any person from being subject to the liability apart from this section (in addition to any person who is subject to the liability by reason of this section), and in particular the liability continues to be a liability of the scheme administrator for the purposes of section 271(2). (10) If a person assumes the liability under section 271(2) at a time after P or Q's appointment as, or as one of the persons who are, the scheme administrator has ceased, the person who has, or the persons who have, the liability by reason of subsection (3) or (4) is, or are, released from the liability. (11) A person who has, or persons who have, the liability by reason of subsection (3) or (4) may apply to an officer of Revenue and Customs to be released from the liability. (12) Section 271(6) to (13) applies in relation to an application under subsection (11) as it applies in relation to an application under section 271(5).

20

In section 273 (members liable as scheme administrator) after subsection (1) insert—

(1A) This section also applies in relation to a registered pension scheme if— (a) a person has, or persons have, by reason of section 272C(7) assumed a liability to pay tax (or interest on tax) by virtue of section 239 (scheme sanction charge) in respect of the whole or a part of a scheme chargeable payment falling within section 241(1)(b) or (c) made (or treated as having been made) by the pension scheme, (b) that person, or each of those persons, has failed (in whole or in part) to satisfy the liability, and (c) that person, or each of those persons, has either died or ceased to exist or is a person in whose case an officer of Revenue and Customs considers the person's failure to satisfy the liability to be of a serious nature.

21

• (1) Section 274 (supplementary) is amended as follows.

• (2) In subsection (1)—

• (a) after “(trustees etc)” insert “ , section 272C(7) ”, and

• (b) in paragraph (b) after “administrator)” insert “ , section 272C(3) or (4) ”.

• (3) In subsection (3)(b) after “272” insert “ , 272C ”.

22

Sections 272A to 272C (as inserted by paragraph 19) have effect for cases where the relevant day falls on or after 1 September 2014.

Other provision

23

In the following provisions (which relate to the giving of information etc) for “incorrect” (in all places) substitute “ inaccurate ”

• (a) section 169(5)(a)(ii);

• (b) section 257(4)(a) and (b);

• (c) section 261(1)(a);

• (d) section 264(2)(a).

SCHEDULE 8

PART 1 — Share incentive plans

Amendments to Chapter 6 of Part 7 of ITEPA 2003

1

Chapter 6 of Part 7 of ITEPA 2003 (employment income: income and exemptions relating to securities: share incentive plans) is amended as follows.

2

In the title omit “Approved”.

3

• (1) Section 488 (introduction to share incentive plans) is amended as follows.

• (2) In the heading omit “Approved”.

• (3) In subsection (1)—

• (a) omit paragraph (a), and

• (b) in paragraph (b) for “those plans” substitute “ share incentive plans (“SIPs”) which are Schedule 2 SIPs ”.

• (4) Omit subsection (2).

• (5) In subsection (4)—

• (a) omit the definitions of “approved” and “approval”, and

• (b) after the definition of “PAYE deduction” insert—

“Schedule 2 SIP” is to be read in accordance with paragraph 1 and Part 10 of Schedule 2;

.

4

• (1) Section 489 (operation of tax advantages) is amended as follows.

• (2) In the heading for “approved” substitute “ Schedule 2 ”.

• (3) In subsection (1) for “an approved” substitute “ a Schedule 2 ”.

5

In section 498 (no charge on shares ceasing to be subject to plan in certain circumstances) in subsection (9)(b) for “an approved” substitute “ a Schedule 2 ”.

6

• (1) Section 500 (operation of tax charges) is amended as follows.

• (2) In the heading for “approved” substitute “ Schedule 2 ”.

• (3) In subsection (1) for “an approved” substitute “ a Schedule 2 ”.

7

In section 503 (charge on partnership share money) in subsection (2), in the entry for paragraph 56, for “withdrawal of plan approval” substitute “ plan ceasing to be a Schedule 2 SIP ”.

8

• (1) Section 506 (charge on partnership shares ceasing to be subject to plan) is amended as follows.

• (2) In subsection (2) for “market value of the shares at the exit date” substitute “ relevant amount ”.

• (3) After subsection (2) insert—

(2A) Subject to subsection (2B), in subsection (2) “the relevant amount” means the market value of the shares at the exit date. (2B) If the shares cease to be subject to the plan by virtue of a provision of the kind mentioned in paragraph 43(2B) of Schedule 2 (provision requiring partnership shares to be offered for sale), in subsection (2) “the relevant amount” means the lesser of— (a) the amount of partnership share money used to acquire the shares, and (b) the market value of the shares at the time they are offered for sale. (2C) Paragraph 92(2) of Schedule 2 (market value of shares subject to a restriction) applies for the purposes of subsection (2B)(b).

• (4) After subsection (3) insert—

(3A) If the shares cease to be subject to the plan by virtue of a provision of the kind mentioned in paragraph 43(2B) of Schedule 2, in subsection (3)(b) the reference to the market value of the shares at the exit date is to be read as a reference to the market value of the shares at the time they are offered for sale (as determined in accordance with paragraph 92(2) of Schedule 2 if relevant).

9

In section 509 (modification of section 696) in subsection (1)(a) for “an approved” substitute “ a Schedule 2 ”.

10

In section 510 (payments by trustees) in subsection (1) for “an approved” substitute “ a Schedule 2 ”.

11

In section 511 (deductions to be made by trustees) in subsection (1) for “an approved” substitute “ a Schedule 2 ”.

12

In section 515 (tax advantages and charges under other Acts) in subsection (2)(a) and (d) for “an approved” substitute “ a Schedule 2 ”.

13

Schedule 2 is amended as follows.

14

In the title omit “Approved”.

15

In the cross-heading before paragraph 1 for “Approval of” substitute “ Introduction to Schedule 2 ”.

16

• (1) Paragraph 1 (introduction) is amended as follows.

• (2) For sub-paragraphs (1) and (2) substitute—

(A1) For the purposes of the SIP code a share incentive plan (a “SIP”) is a Schedule 2 SIP if the requirements of Parts 2 to 9 of this Schedule are met in relation to the SIP.

• (3) For sub-paragraph (4) substitute—

(4) Sub-paragraph (A1) is subject to Part 10 of this Schedule which— (a) requires notice of a plan to be given to Her Majesty's Revenue and Customs (“HMRC”) in order for the plan to be a Schedule 2 SIP (see paragraph 81A(1)), (b) provides for a plan in relation to which such notice is given to be a Schedule 2 SIP (see paragraph 81A(4)), and (c) gives power to HMRC to enquire into a plan and to decide that the plan should not be a Schedule 2 SIP (see paragraphs 81F to 81I).

17

In the cross-heading before paragraph 6 omit “for approval”.

18

• (1) Paragraph 6 (general requirements for SIPs) is amended as follows.

• (2) Make the existing text sub-paragraph (1).

• (3) After the new sub-paragraph (1) insert—

(2) The requirements of this Part are also to be taken to include the requirements of paragraphs 89 and 90 (plan termination notices etc).

19

• (1) Paragraph 7 (the purpose of the plan) is amended as follows.

• (2) In sub-paragraph (1)—

• (a) after “provide” insert “ , in accordance with this Schedule, ”, and

• (b) for “nature” substitute “ form ”.

• (3) After sub-paragraph (1) insert—

(1A) The plan must not provide benefits to employees otherwise than in accordance with this Schedule. (1B) For example, the plan must not provide cash to employees as an alternative to shares. (1C) Sub-paragraph (1A) does not prohibit an employee receiving a benefit from a company as a result of any shares in that company being held on the employee's behalf under the plan where the employee would have received the same benefit from the company had the shares been acquired by the employee otherwise than by virtue of the plan.

• (4) Omit sub-paragraph (2).

20

In paragraph 18 (requirement not to participate in other SIPs) in sub-paragraph (1) for “approved” substitute “ Schedule 2 ”.

21

In paragraph 18A (participation in more than one connected SIP) in sub-paragraph (1) for “approved” substitute “ Schedule 2 ”.

22

In paragraph 37 (holding period: power of participant to direct trustees) in sub-paragraph (3)(b) for “an approved” substitute “ a Schedule 2 ”.

23

In paragraph 43 (partnership shares: introduction) after sub-paragraph (2A) insert—

(2B) Partnership shares may (notwithstanding sub-paragraph (2A) if relevant) be subject to provision requiring partnership shares acquired on behalf of an employee to be offered for sale but only if the requirement of sub-paragraph (2C) is met. (2C) The consideration at which the shares are required to be offered for sale must be at least equal to— (a) the amount of partnership share money applied in acquiring the shares on behalf of the employee, or (b) if lower, the market value of the shares at the time they are offered for sale.

24

In the cross-heading before paragraph 56 for “withdrawal of approval” substitute “ plan ceasing to be a Schedule 2 SIP ”.

25

• (1) Paragraph 56 (repayment of partnership share money) is amended as follows.

• (2) In sub-paragraph (1) for “approval of the plan is withdrawn (see paragraph 83)” substitute “ plan is not to be a Schedule 2 SIP by virtue of paragraph 81H or 81I ”.

• (3) In sub-paragraph (2) for the words from “notice” to the end substitute “ the relevant day ”.

• (4) After sub-paragraph (2) insert—

(2A) If the plan is not to be a Schedule 2 SIP by virtue of paragraph 81H, in sub-paragraph (2) “the relevant day” means— (a) the last day of the period in which notice of an appeal under paragraph 81K(2)(a) may be given, or (b) if notice of such an appeal is given, the day on which the appeal is determined or withdrawn. (2B) If the plan is not to be a Schedule 2 SIP by virtue of paragraph 81I, in sub-paragraph (2) “the relevant day” means— (a) the last day of the period in which notice of an appeal under paragraph 81K(3) may be given, or (b) if notice of such an appeal is given, the day on which the appeal is determined or withdrawn.

26

• (1) Paragraph 65 (general requirements as to dividend shares) is amended as follows.

• (2) Make the existing text sub-paragraph (1).

• (3) After the new sub-paragraph (1) insert—

(2) Dividend shares may (notwithstanding sub-paragraph (1)(b) if relevant) be subject to provision requiring dividend shares acquired on behalf of an employee to be offered for sale but only if the requirement of sub-paragraph (3) is met. (3) The consideration at which the shares are required to be offered for sale must be at least equal to— (a) the amount of the cash dividends applied in acquiring the shares on behalf of the employee, or (b) if lower, the market value of the shares at the time they are offered for sale.

27

In paragraph 71A (duty to monitor participants) for “approved” substitute “ Schedule 2 ”.

28

For Part 10 substitute—

(81A) (1) For a SIP to be a Schedule 2 SIP, notice of the SIP must be given to Her Majesty's Revenue and Customs (“HMRC”). (2) The notice must— (a) be given by the company, (b) contain, or be accompanied by, such information as HMRC may require, and (c) contain a declaration within sub-paragraph (3) made by such persons as HMRC may require. (3) A declaration within this sub-paragraph is a declaration— (a) that the requirements of Parts 2 to 9 of this Schedule are met in relation to the SIP, and (b) if the declaration is made after the first date on which awards of shares are made under the SIP (“the first award date”), that those requirements— (i) were met in relation to those awards of shares, and (ii) have otherwise been met in relation to the SIP at all times on or after the first award date when shares appropriated to, or acquired on behalf of, individuals under the SIP have been held under the SIP. (4) If notice is given under this paragraph in relation to a SIP, for the purposes of the SIP code the SIP is to be a Schedule 2 SIP at all times on and after the relevant date (but not before that date). (5) But if the notice is given after the initial notification deadline, the SIP is to be a Schedule 2 SIP only from the beginning of the relevant tax year. (6) For the purposes of this Part— - “the initial notification deadline” is 6 July in the tax year following that in which the first award date falls, - “the relevant date” is— 1. the date on which the declaration within sub-paragraph (3) is made, or 2. if that declaration is made after the first award date, the first award date, and - “the relevant tax year” is— 1. the tax year in which the notice under this paragraph is given, or 2. if that notice is given on or before 6 July in that tax year, the preceding tax year. (7) Sub-paragraph (4) is subject to the following paragraphs of this Part. (81B) (1) This paragraph applies if notice is given in relation to a SIP under paragraph 81A. (2) The company must give to HMRC a return for the tax year in which the relevant date falls and for each subsequent tax year (subject to sub-paragraph (9)). (3) If paragraph 81A(5) applies in relation to the SIP, in sub-paragraph (2) the reference to the tax year in which the relevant date falls is to be read as a reference to the relevant tax year. (4) A return for a tax year must— (a) contain, or be accompanied by, such information as HMRC may require, and (b) be given on or before 6 July in the following tax year. (5) The information which may be required under sub-paragraph (4)(a) includes (in particular) information to enable HMRC to determine the liability to tax, including capital gains tax, of— (a) any person who has participated in the SIP, or (b) any other person whose liability to tax the operation of the SIP is relevant to. (6) If during a tax year an alteration is made in a key feature of— (a) the SIP, or (b) the plan trust, the return for the tax year must contain a declaration within sub-paragraph (7) made by such persons as HMRC may require. (7) A declaration within this sub-paragraph is a declaration that the alteration has not caused the requirements of Parts 2 to 9 of this Schedule not to be met in relation to the SIP. (8) For the purposes of sub-paragraph (6) a “key feature” of a SIP or plan trust is a provision of the SIP or plan trust which is necessary in order for the requirements of Parts 2 to 9 of this Schedule to be met in relation to the SIP. (9) A return is not required for any tax year following that in which the termination condition is met in relation to the SIP. (10) For the purposes of this Part “the termination condition” is met in relation to a SIP when— (a) a plan termination notice has been issued in relation to it under paragraph 89, and (b) all the requirements under paragraphs 56(3), 68(4)(c) and 90 have been met by the trustees. (11) If the company becomes aware that— (a) anything which should have been included in, or should have accompanied, a return for a tax year was not included in, or did not accompany, the return, (b) anything which should not have been included in, or should not have accompanied, a return for a tax year was included in, or accompanied, the return, or (c) any other error or inaccuracy has occurred in relation to a return for a tax year, the company must give an amended return correcting the position to HMRC without delay. (81C) (1) This paragraph applies if the company fails to give a return for a tax year (containing, or accompanied by, all required information and declarations) on or before the date mentioned in paragraph 81B(4)(b) (“the date for delivery”). (2) The company is liable for a penalty of £100. (3) If the company's failure continues after the end of the period of 3 months beginning with the date for delivery, the company is liable for a further penalty of £300. (4) If the company's failure continues after the end of the period of 6 months beginning with the date for delivery, the company is liable for a further penalty of £300. (5) The company is liable for a further penalty under this sub-paragraph if— (a) the company's failure continues after the end of the period of 9 months beginning with the date for delivery, (b) HMRC decide that such a penalty should be payable, and (c) HMRC give notice to the company specifying the period in respect of which the penalty is payable. (The company may be liable for more than one penalty under this sub-paragraph.) (6) The penalty under sub-paragraph (5) is £10 for each day that the failure continues during the period specified in the notice under sub-paragraph (5)(c). (7) The period specified in the notice under sub-paragraph (5)(c)— (a) may begin earlier than the date on which the notice is given, but (b) may not begin until after the end of the period mentioned in sub-paragraph (5)(a) or, if relevant, the end of any period specified in any previous notice under sub-paragraph (5)(c) given in relation to the failure. (8) Liability for a penalty under this paragraph does not arise if the company satisfies HMRC (or, on an appeal under paragraph 81K, the tribunal) that there is a reasonable excuse for its failure. (9) For the purposes of sub-paragraph (8)— (a) an insufficiency of funds is not a reasonable excuse, unless attributable to events outside the company's control, (b) where the company relies on any other person to do anything, that is not a reasonable excuse unless the company took reasonable care to avoid the failure, and (c) where the company had a reasonable excuse for the failure but the excuse ceased, the company is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased. (81D) (1) A notice under paragraph 81A, and any information accompanying the notice, must be given electronically. (2) A return under paragraph 81B, and any information accompanying the return, must be given electronically. (3) But, if HMRC consider it appropriate to do so, HMRC may allow the company to give a notice or return or any accompanying information in another way; and, if HMRC do so, the notice, return or information must be given in that other way. (4) The Commissioners for Her Majesty's Revenue and Customs— (a) must prescribe how notices, returns and accompanying information are to be given electronically; (b) may make different provision for different cases or circumstances. (81E) (1) This paragraph applies if a return under paragraph 81B, or any information accompanying such a return— (a) is given otherwise than in accordance with paragraph 81D, or (b) contains a material inaccuracy— (i) which is careless or deliberate, or (ii) which is not corrected as required by paragraph 81B(11). (2) The company is liable for a penalty of an amount decided by HMRC. (3) The penalty must not exceed £5,000. (4) For the purposes of sub-paragraph (1)(b)(i) an inaccuracy is careless if it is due to a failure by the company to take reasonable care. (81F) (1) This paragraph applies if notice is given in relation to a SIP under paragraph 81A. (2) HMRC may enquire into the SIP if HMRC give notice to the company of HMRC's intention to do so no later than— (a) 6 July in the tax year following the tax year in which the initial notification deadline falls, or (b) if the notice under paragraph 81A is given after the initial notification deadline, 6 July in the second tax year following the relevant tax year. (3) HMRC may enquire into the SIP if HMRC give notice to the company of HMRC's intention to do so no later than 12 months after the date on which a declaration within paragraph 81B(7) is given to HMRC. (4) Sub-paragraph (5) applies if (at any time) HMRC have reasonable grounds for believing that requirements of Parts 2 to 9 of this Schedule— (a) are not met in relation to the SIP, or (b) have not been met in relation to the SIP. (5) HMRC may enquire into the SIP if HMRC give notice to the company of HMRC's intention to do so. (6) Notice may be given, and an enquiry may be conducted, under sub-paragraph (2), (3) or (5) even though the termination condition has been met in relation to the SIP. (81G) (1) An enquiry under paragraph 81F(2), (3) or (5) is completed when HMRC give the company a notice (a “closure notice”) stating— (a) that HMRC have completed the enquiry, and (b) that— (i) paragraph 81H is to apply, (ii) paragraph 81I is to apply, or (iii) neither paragraph 81H nor paragraph 81I is to apply. (2) If the company receives notice under paragraph 81F(2), (3) or (5), the company may make an application to the tribunal for a direction requiring a closure notice for the enquiry to be given within a specified period. (3) The application is to be subject to the relevant provisions of Part 5 of TMA 1970 (see, in particular, section 48(2)(b) of that Act). (4) The tribunal must give a direction unless satisfied that HMRC have reasonable grounds for not giving the closure notice within the specified period. (81H) (1) This paragraph applies if HMRC decide— (a) that requirements of Parts 2 to 9 of this Schedule— (i) are not met in relation to the SIP, or (ii) have not been met in relation to the SIP, and (b) that the situation is, or was, so serious that this paragraph should apply. (2) If this paragraph applies— (a) the SIP is not to be a Schedule 2 SIP with effect from— (i) such relevant time as is specified in the closure notice, or (ii) if no relevant time is specified, the time of the giving of the closure notice, and (b) the company is liable for a penalty of an amount decided by HMRC. (3) Sub-paragraph (2)(a) does not affect the operation of the SIP code in relation to shares appropriated to, or acquired on behalf of, an individual under the SIP before the time mentioned in sub-paragraph (2)(a)(i) or (ii) (as the case may be). (4) In particular, if the SIP was a Schedule 2 SIP when the shares were appropriated to, or acquired on behalf of, the individual, the SIP is to continue to be a Schedule 2 SIP in relation to those shares. (5) The penalty under sub-paragraph (2)(b) must not exceed an amount equal to twice HMRC's reasonable estimate of— (a) the total income tax for which participants in the SIP have not been liable, or will not be liable in the future, and (b) the total contributions under Part 1 of SSCBA 1992 or SSCB(NI)A 1992 for which any persons have not been liable, or will not be liable in the future, in consequence of the SIP having been a Schedule 2 SIP at any relevant time before the time mentioned in sub-paragraph (2)(a)(i) or (ii) (as the case may be). (6) The liabilities covered by sub-paragraph (5) include liabilities for income tax or contributions which a person has not had, or will not have, in consequence of sub-paragraphs (3) and (4). (7) In this paragraph “relevant time” means any time before the giving of the closure notice when requirements of Parts 2 to 9 of this Schedule were not met in relation to the SIP. (81I) (1) This paragraph applies if HMRC decide— (a) that requirements of Parts 2 to 9 of this Schedule— (i) are not met in relation to the SIP, or (ii) have not been met in relation to the SIP, but (b) that the situation is not, or was not, so serious that paragraph 81H should apply. (2) If this paragraph applies, the company— (a) is liable for a penalty of an amount decided by HMRC, and (b) must, no later than 90 days after the relevant day, secure that the requirements of Parts 2 to 9 of this Schedule are met in relation to the SIP. (3) The penalty under sub-paragraph (2)(a) must not exceed £5,000. (4) In sub-paragraph (2)(b) “the relevant day” means— (a) the last day of the period in which notice of an appeal under paragraph 81K(2)(b) may be given, or (b) if notice of such an appeal is given, the day on which the appeal is determined or withdrawn. (5) Sub-paragraph (2)(b) does not apply if the termination condition was met in relation to the SIP before the giving of the closure notice or is met before the end of the 90 day period mentioned in sub-paragraph (2)(b). (6) If the company fails to comply with sub-paragraph (2)(b), HMRC may give the company a notice stating that that is the case (a “default notice”). (7) If the company is given a default notice— (a) the SIP is not to be a Schedule 2 SIP with effect from— (i) such relevant time as is specified in the default notice, or (ii) if no relevant time is specified, the time of the giving of the default notice, and (b) the company is liable for a further penalty of an amount decided by HMRC. (8) Sub-paragraph (7)(a) does not affect the operation of the SIP code in relation to shares appropriated to, or acquired on behalf of, an individual under the SIP before the time mentioned in sub-paragraph (7)(a)(i) or (ii) (as the case may be). (9) In particular, if the SIP was a Schedule 2 SIP when the shares were appropriated to, or acquired on behalf of, the individual, the SIP is to continue to be a Schedule 2 SIP in relation to those shares. (10) The penalty under sub-paragraph (7)(b) must not exceed an amount equal to twice HMRC's reasonable estimate of— (a) the total income tax for which participants in the SIP have not been liable, or will not be liable in the future, and (b) the total contributions under Part 1 of SSCBA 1992 or SSCB(NI)A 1992 for which any persons have not been liable, or will not be liable in the future, in consequence of the SIP having been a Schedule 2 SIP at any relevant time before the time mentioned in sub-paragraph (7)(a)(i) or (ii) (as the case may be). (11) The liabilities covered by sub-paragraph (10) include liabilities for income tax or contributions which a person has not had, or will not have, in consequence of sub-paragraphs (8) and (9). (12) In this paragraph “relevant time” means any time before the giving of the default notice when requirements of Parts 2 to 9 of this Schedule were not met in relation to the SIP. (81J) (1) This paragraph applies if the company is liable for a penalty under this Part. (2) HMRC must assess the penalty and notify the company of the assessment. (3) Subject to sub-paragraphs (4) and (5), the assessment must be made no later than 12 months after the date on which the company becomes liable for the penalty. (4) In the case of a penalty under paragraph 81E(1)(b), the assessment must be made no later than— (a) 12 months after the date on which HMRC become aware of the inaccuracy, and (b) 6 years after the date on which the company becomes liable for the penalty. (5) In the case of a penalty under paragraph 81H(2)(b) or 81I(2)(a) or (7)(b) where notice of appeal is given under paragraph 81K(2) or (3), the assessment must be made no later than 12 months after the date on which the appeal is determined or withdrawn. (6) A penalty payable under this Part must be paid— (a) no later than 30 days after the date on which the notice under sub-paragraph (2) is given to the company, or (b) if notice of appeal is given against the penalty under paragraph 81K(1) or (4), no later than 30 days after the date on which the appeal is determined or withdrawn. (7) The penalty may be enforced as if it were corporation tax or, if the company is not within the charge to corporation tax, income tax charged in an assessment and due and payable. (8) Sections 100 to 103 of TMA 1970 do not apply to a penalty under this Part. (81K) (1) The company may appeal against a decision of HMRC that the company is liable for a penalty under paragraph 81C or 81E. (2) The company may appeal against— (a) a decision of HMRC mentioned in paragraph 81H(1) or a decision of HMRC to specify, or not to specify, a relevant time in the closure notice; (b) a decision of HMRC mentioned in paragraph 81I(1). (3) The company may appeal against a decision of HMRC— (a) to give the company a default notice under paragraph 81I; (b) to specify, or not to specify, a relevant time in the default notice. (4) The company may appeal against a decision of HMRC as to the amount of a penalty payable by the company under this Part. (5) The company may appeal against a decision of an officer of Revenue and Customs to give a direction under section 998 of CTA 2009 (withdrawal of corporation tax deductions in relation to a Schedule 2 SIP). (6) Notice of appeal must be given to HMRC no later than 30 days after the date on which— (a) in the case of an appeal under sub-paragraph (1) or (4), the notice under paragraph 81J(2) is given to the company; (b) in the case of an appeal under sub-paragraph (2), the closure notice is given; (c) in the case of an appeal under sub-paragraph (3), the default notice is given; (d) in the case of an appeal under sub-paragraph (5), notice of the officer's decision is given to the company. (7) On an appeal under sub-paragraph (1), (3)(a) or (5) which is notified to the tribunal, the tribunal may affirm or cancel the decision. (8) On an appeal under sub-paragraph (2) or (3)(b) which is notified to the tribunal, the tribunal may— (a) affirm or cancel the decision, or (b) substitute for the decision another decision which HMRC had power to make. (9) On an appeal under sub-paragraph (4) which is notified to the tribunal, the tribunal may— (a) affirm the amount of the penalty decided, or (b) substitute another amount for that amount. (10) Subject to this paragraph and paragraph 81J, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to an appeal under this paragraph as they have effect in relation to an appeal against an assessment to corporation tax or, if the company is not within the charge to corporation tax, income tax.

29

In paragraph 89 (termination of plan) in sub-paragraph (2) omit paragraph (a).

30

In paragraph 90 (effect of plan termination notice) in sub-paragraph (2) for “awarded to” substitute “ appropriated to, or acquired on behalf of, ”.

31

• (1) Paragraph 93 (power to require information) is amended as follows.

• (2) For sub-paragraph (1) substitute—

(1) An officer of Revenue and Customs may by notice require a person to provide the officer with any information— (a) which the officer reasonably requires for the performance of any functions of Her Majesty's Revenue and Customs or an officer of Revenue and Customs under the SIP code, and (b) which the person to whom the notice is addressed has or can reasonably obtain.

• (3) In sub-paragraph (2)(a)—

• (a) for sub-paragraph (i) substitute—

(i) to check anything contained in a notice under paragraph 81A or a return under paragraph 81B or to check any information accompanying such a notice or return, or”, and

• (b) in sub-paragraph (ii) after “plan” insert “ or any other person whose liability to tax the operation of a plan is relevant to ”.

32

In paragraph 100 (index of defined expressions)—

• (a) omit the entries for “approval” and “approved”, and

• (b) at the appropriate place insert—

Schedule 2 SIP	paragraph 1 and Part 10 of this Schedule

.

Other amendments: TCGA 1992

33

TCGA 1992 is amended as follows.

34

In section 236A (relief for transfers to share incentive plans) for “an approved” substitute “ a Schedule 2 ”.

35

• (1) Section 238A (share schemes and share incentives) is amended as follows.

• (2) In the heading omit “Approved”.

• (3) In subsection (1) omit “approved”.

• (4) In subsection (2)(a) for “approved” substitute “ Schedule 2 ”.

36

Schedule 7C (relief for transfers to share plans) is amended as follows.

37

In the title for “approved” substitute “ Schedule 2 ”.

38

In paragraph 2 (conditions relating to disposal) in sub-paragraph (1) for “approved” substitute “ a Schedule 2 SIP ”.

39

Schedule 7D (share schemes and share incentives) is amended as follows.

40

In the title omit “Approved”.

41

In the title of Part 1 for “Approved” substitute “ Schedule 2 ”.

42

• (1) Paragraph 1 (introduction to Part 1) is amended as follows.

• (2) In sub-paragraph (1) for “an approved” substitute “ a Schedule 2 ”.

• (3) In sub-paragraphs (2) and (3) omit “approved”.

43

In paragraph 2 (gains accruing to trustees) in sub-paragraph (1)(a) omit “approved”.

Other amendments: ITEPA 2003 and Part 4 of FA 2004

44

ITEPA 2003 is amended as follows.

45

In section 227 (scope of Part 4) in subsection (4)(c) omit “approved”.

46

In section 417 (scope of Part 7) in subsection (2), in the entry for Chapter 6, omit “approved”.

47

• (1) Section 431A (provision relating to restricted securities) is amended as follows.

• (2) In the heading for “approved” substitute “ tax advantaged ”.

• (3) In subsection (2)(a) for “an approved” substitute “ a Schedule 2 ”.

48

In section 549 (application of Chapter 11 of Part 7) in subsection (2)(a) omit “approved”.

49

• (1) Section 554E (exclusions under Part 7A) is amended as follows.

• (2) In subsections (1)(a) and (3)(a)(i) and (b)(i) for “an approved” substitute “ a Schedule 2 ”.

• (3) In subsection (4)(a) and (b) for the first “approved” substitute “ Schedule 2 ”.

50

In paragraph 11 of Schedule 4 (CSOP schemes: material interest) in sub-paragraph (5)(a) for “approved” substitute “ Schedule 2 ”.

51

In paragraph 30 of Schedule 5 (enterprise management incentives: material interest) in sub-paragraph (7)(a) for “share incentive plan approved under Schedule 2 (SIPs)” substitute “ Schedule 2 SIP (see Schedule 2) ”.

52

In section 195 of FA 2004 (pensions: transfer of certain shares to be treated as payment of contribution) in subsection (5), in the definition of “share incentive plan”, omit “approved”.

Other amendments: ITTOIA 2005

53

Chapter 3 of Part 4 of ITTOIA 2005 (savings and investment income: dividends etc from UK resident companies) is amended as follows.

54

In section 382 (contents of Chapter 3) in subsection (1)(c) for “an approved” substitute “ a Schedule 2 ”.

55

In the cross-heading before section 392 for “approved” substitute “ Schedule 2 ”.

56

In section 392 (SIP shares: introduction) in subsection (1) for “an approved” substitute “ a Schedule 2 ”.

57

• (1) Section 394 (distribution when dividend shares cease to be subject to SIP) is amended as follows.

• (2) In subsection (1) for “an approved” substitute “ a Schedule 2 ”.

• (3) After subsection (3) insert—

(3A) But if the shares cease to be subject to the plan by virtue of a provision of the kind mentioned in paragraph 65(2) of Schedule 2 to ITEPA 2003 (provision requiring dividend shares to be offered for sale), the amount of the distribution treated as made is the amount equal to the relevant fraction of the market value of the shares at the time they are offered for sale if that amount is less than the amount given by subsection (3). (3B) For the purposes of subsection (3A) “the relevant fraction” is— $$A B$where—A is so much of the amount of the cash dividend applied to acquire the shares on the participant's behalf as represents a cash dividend paid in respect of plan shares in a UK resident company, andB is the amount of the cash dividend applied to acquire the shares on the participant's behalf.$ (3C) Paragraph 92(2) of Schedule 2 to ITEPA 2003 (market value of shares subject to a restriction) applies for the purposes of subsection (3A).

• (4) In subsection (7) for “approved” substitute “ Schedule 2 ”.

58

In section 395 (reduction in tax due in cases within section 394) in subsections (1)(b) and (4) for “approved” substitute “ Schedule 2 ”.

59

In section 396 (interpretation) in subsections (1) and (2) omit “approved”.

60

Chapter 4 of Part 4 of ITTOIA 2005 (savings and investment income: dividends etc from non-UK resident companies) is amended as follows.

61

In the cross-heading before section 405 for “approved” substitute “ Schedule 2 ”.

62

• (1) Section 405 (SIP shares: introduction) is amended as follows.

• (2) In subsection (1) for “an approved” substitute “ a Schedule 2 ”.

• (3) In subsections (3) and (4) omit “approved”.

63

• (1) Section 407 (dividend payment when dividend shares cease to be subject to SIP) is amended as follows.

• (2) In subsection (1) for “an approved” substitute “ a Schedule 2 ”.

• (3) After subsection (3) insert—

(3A) But if the shares cease to be subject to the plan by virtue of a provision of the kind mentioned in paragraph 65(2) of Schedule 2 to ITEPA 2003 (provision requiring dividend shares to be offered for sale), the amount of the dividend treated as paid is the amount equal to the relevant fraction of the market value of the shares at the time they are offered for sale if that amount is less than the amount given by subsection (3). (3B) For the purposes of subsection (3A) “the relevant fraction” is— $$A B$where—A is so much of the amount of the cash dividend applied to acquire the shares on the participant's behalf as represents a cash dividend paid in respect of plan shares in a non-UK resident company, andB is the amount of the cash dividend applied to acquire the shares on the participant's behalf.$ (3C) Paragraph 92(2) of Schedule 2 to ITEPA 2003 (market value of shares subject to a restriction) applies for the purposes of subsection (3A).

• (4) In subsection (5) for “approved” substitute “ Schedule 2 ”.

64

In section 408 (reduction in tax due in cases within section 407) in subsections (1)(b) and (3) for “approved” substitute “ Schedule 2 ”.

65

Chapter 9 of Part 6 of ITTOIA 2005 (exempt income) is amended as follows.

66

In the cross-heading before section 770 for “Approved” substitute “ Schedule 2 ”.

67

• (1) Section 770 (amounts applied by SIP trustees) is amended as follows.

• (2) In subsection (1)(a) for “an approved” substitute “ a Schedule 2 ”.

• (3) In subsections (5) and (6) omit “approved”.

Other amendments: Part 9 of ITA 2007

68

Part 9 of ITA 2007 (special rules about settlements and trusts) is amended as follows.

69

In section 462 (overview of Part) in subsection (5) for “an approved” substitute “ a Schedule 2 ”.

70

In section 479 (trustees' accumulated or discretionary income charged at special rates) in subsection (5) for “approved” substitute “ Schedule 2 ”.

71

• (1) Section 488 (application of section 479 to trustees of SIP) is amended as follows.

• (2) In the heading for “approved” substitute “ Schedule 2 ”.

• (3) In subsection (1)—

• (a) in paragraph (a) for “an approved” substitute “ a Schedule 2 ”, and

• (b) in paragraph (b) omit “approved”.

72

In section 489 (“the applicable period”) in subsection (8)(a) for “approved” substitute “ Schedule 2 ”.

73

In section 490 (interpretation of Chapter 5) in subsection (1) omit “approved”.

Other amendments: Chapter 1 of Part 11 of CTA 2009

74

Chapter 1 of Part 11 of CTA 2009 (relief for employee share acquisition schemes: share incentive plans) is amended as follows.

75

• (1) Section 983 (overview of Chapter) is amended as follows.

• (2) In subsection (1) for “approved” substitute “ Schedule 2 ”.

• (3) In subsection (7) for “approval for a plan is withdrawn” substitute “ a plan ceases to be a Schedule 2 share incentive plan ”.

76

• (1) Section 987 (deduction for cost of setting up plan) is amended as follows.

• (2) In the heading for “an approved” substitute “ a Schedule 2 ”.

• (3) In subsection (1) for “approved by an officer of Revenue and Customs” substitute “ a Schedule 2 share incentive plan ”.

• (4) Omit subsection (3).

• (5) In subsection (4) for “approval is given” (in both places) substitute “ relevant date falls ”.

• (6) After subsection (4) insert—

(4A) In subsection (4) “the relevant date”, in relation to a share incentive plan, has the meaning given in paragraph 81A(6) of Schedule 2 to ITEPA 2003.

77

• (1) Section 988 (deductions for running expenses) is amended as follows.

• (2) In the heading for “an approved” substitute “ a Schedule 2 ”.

• (3) In subsections (1) and (3) for “an approved” substitute “ a Schedule 2 ”.

78

In section 989 (deduction for contribution to plan trust) in subsection (1)(a) for “an approved” substitute “ a Schedule 2 ”.

79

In section 994 (deduction for providing free or matching shares) in subsection (1) for “an approved” substitute “ a Schedule 2 ”.

80

In section 995 (deduction for additional expense in providing partnership shares) in subsection (1)(a) for “an approved” substitute “ a Schedule 2 ”.

81

In section 997 (no deduction for expenses in providing dividend shares) in subsection (1) for “an approved” substitute “ a Schedule 2 ”.

82

For the cross-heading before section 998 substitute “ Plan ceasing to be a Schedule 2 SIP ”.

83

• (1) Section 998 (withdrawal of deductions) is amended as follows.

• (2) In the heading for “approval for share incentive plan withdrawn” substitute “ share incentive plan ceases to be a Schedule 2 share incentive plan ”.

• (3) In subsection (1)—

• (a) in paragraph (a)—

• (i) after “section” insert “ 987, ”, and

• (ii) for “an approved” substitute “ a Schedule 2 ”, and

• (b) for paragraph (b) substitute—

(b) by virtue of paragraph 81H or 81I of Schedule 2 to ITEPA 2003 the plan is not to be a Schedule 2 share incentive plan.

Other amendments: Individual Savings Account Regulations 1998 (S.I. 1998/1870)

84

The Individual Savings Account Regulations 1998 are amended as follows.

85

In regulation 2 (interpretation) in paragraph (1)(a)—

• (a) omit the definition of “approved SIP”,

• (b) in the definitions of “ceasing to be subject to the plan”, “participant” and “plan shares” for “an approved” substitute “ a Schedule 2 ”, and

• (c) at the appropriate place insert—

“Schedule 2 SIP” shall be construed in accordance with the SIP code (see section 488(3) of ITEPA 2003);

.

86

In regulation 7 (qualifying investments) in paragraph (2)(h)(iii) for “an approved” substitute “ a Schedule 2 ”.

87

In regulation 34 (capital gains tax: adaptation of enactments) in paragraph (2)(a)—

• (a) in the inserted subsections (12)(b)(iii) and (13)(d) for “an approved” substitute “ a Schedule 2 ”, and

• (b) in the inserted subsection (13)(c) for “approved” substitute “ Schedule 2 ”.

Revocation of Employee Share Schemes (Electronic Communication of Returns and Information) Regulations 2007 (S.I. 2007/792)

88

The Employee Share Schemes (Electronic Communication of Returns and Information) Regulations 2007 are revoked.

Commencement and transitional provision

89

This Part is treated as having come into force on 6 April 2014.

90

Paragraphs 91 to 96 below apply in relation to a SIP established before 6 April 2014.

91

• (1) If the SIP was an approved SIP immediately before 6 April 2014, this paragraph applies to any provision which the SIP contains immediately before that date and which requires the approval or agreement of Her Majesty's Revenue and Customs or an officer of Revenue and Customs to be obtained in relation to any matter.

• (2) On and after 6 April 2014, the provision is to have effect without the requirement for the approval or agreement, unless the requirement reflects a requirement for approval or agreement set out in Schedule 2 to ITEPA 2003 (as amended by this Part).

92

• (1) If the SIP was an approved SIP immediately before 6 April 2014, the amendments made by paragraph 19 above have effect in relation to the SIP only if, and when, there is an alteration in a key feature of the SIP or plan trust on or after that date.

• (2) In sub-paragraph (1) “key feature” has the meaning given in paragraph 81B(8) of Schedule 2 to ITEPA 2003 (as inserted by paragraph 28 above).

93

If the SIP was an approved SIP immediately before 6 April 2014, on and after that date the SIP and the plan trust have effect with any modifications needed to reflect the amendments made by paragraphs 20 to 22, 25, 27, 29 and 30 above.

94

• (1) Paragraph 81A of Schedule 2 to ITEPA 2003 (as inserted by paragraph 28 above) has effect in relation to the SIP—

• (a) as if, at the end of sub-paragraph (1), the words “on or before 6 July 2015” were inserted,

• (b) if the first date on which awards of shares are made under the SIP falls before 6 April 2014—

• (i) as if, in sub-paragraph (3)(b), the reference to that date were a reference to 6 April 2014 and, accordingly, as if all references in paragraph 81A to the first award date were references to 6 April 2014,

• (ii) as if sub-paragraph (3)(b)(i) were omitted, and

• (iii) as if, in sub-paragraph (3)(b)(ii), “otherwise” were omitted,

• (c) as if sub-paragraph (5) were omitted, and

• (d) as if, in sub-paragraph (6), the definitions of “the initial notification deadline” and “the relevant tax year” were omitted.

• (2) But the SIP cannot be a Schedule 2 SIP if, before 6 April 2014, an application for its approval was refused or an officer of Revenue and Customs decided to withdraw its approval.

• (3) Sub-paragraph (2) is without prejudice to the outcome of any appeal under paragraph 82 or 85 of Schedule 2 to ITEPA 2003 against the refusal or decision to withdraw approval.

• (4) The amendments made by this Part do not affect any right of appeal under paragraph 82 or 85 of Schedule 2 to ITEPA 2003 against a refusal or decision made before 6 April 2014 in relation to the SIP.

• (5) Sub-paragraphs (6) and (7) apply if shares (“the relevant shares”) were appropriated to, or acquired on behalf of, an individual before 6 April 2014 under the SIP at a time when the SIP was an approved SIP.

• (6) On and after 6 April 2014, the SIP code operates in relation to the relevant shares—

• (a) as if the relevant shares were appropriated to, or acquired on behalf of, the individual under the SIP at a time when the SIP was a Schedule 2 SIP, and

• (b) if no notice under paragraph 81A of Schedule 2 to ITEPA 2003 is given in relation to the SIP or if the SIP cannot be a Schedule 2 SIP because of sub-paragraph (2) of this paragraph, as if the SIP were a Schedule 2 SIP despite no notice being given or despite sub-paragraph (2).

• (7) If no notice under paragraph 81A of Schedule 2 to ITEPA 2003 is given in relation to the SIP, paragraph 81B of that Schedule (as inserted by paragraph 28 above) is to apply in relation to the SIP despite no notice being given; and, for this purpose, the relevant date is to be taken to be 6 April 2014.

• (8) In relation to the SIP—

• (a) paragraph 81F of Schedule 2 to ITEPA 2003 (as inserted by paragraph 28 above) has effect as if for sub-paragraph (2) there were substituted—

(2) HMRC may enquire into the SIP if HMRC give notice to the company of HMRC's intention to do so no later than 6 July 2016.

, and

• (b) the cases covered by paragraphs 81F(4)(b), 81H(1)(a)(ii) and 81I(1)(a)(ii) of Schedule 2 to ITEPA 2003 (as inserted by paragraph 28 above) include cases in which requirements of Parts 2 to 9 of that Schedule were not met before 6 April 2014.

95

If the SIP was an approved SIP before 6 April 2014, the amendments made by this Part do not affect the deductions which may be made in relation to the SIP under section 987 of CTA 2009 (deduction for costs of setting up SIP) if they would otherwise do so; and the amendment made by paragraph 83(3)(a)(i) above has no effect in relation to such deductions.

96

The amendments made by paragraph 31 above do not affect a notice given in relation to the SIP under paragraph 93 of Schedule 2 to ITEPA 2003 before 6 April 2014.

PART 2 — SAYE option schemes

Amendments to Chapter 7 of Part 7 of ITEPA 2003

97

Chapter 7 of Part 7 of ITEPA 2003 (employment income: income and exemptions relating to securities: SAYE option schemes) is amended as follows.

98

In the title omit “Approved”.

99

• (1) Section 516 (introduction to SAYE option schemes) is amended as follows.

• (2) In the heading omit “Approved”.

• (3) In subsection (1)—

• (a) omit paragraph (a) and the “and” after it, and

• (b) in paragraph (b) for “those” substitute “ SAYE option schemes which are Schedule 3 SAYE option ”.

• (4) Omit subsection (2).

• (5) In subsection (3)(c) for “approved” substitute “ Schedule 3 ”.

• (6) In subsection (4)—

• (a) omit the definition of “approved”, and

• (b) after the definition of “SAYE option scheme” insert—

“Schedule 3 SAYE option scheme” is to be read in accordance with paragraph 1 and Part 8 of Schedule 3;

.

100

In section 517 (share options to which Chapter applies) in subsection (1)(a) for “an approved” substitute “ a Schedule 3 ”.

101

• (1) Section 519 (no charge in respect of exercise of option) is amended as follows.

• (2) In subsection (1)(a) for “approved” substitute “ a Schedule 3 SAYE option scheme ”.

• (3) In subsection (3A)—

• (a) in paragraph (a) for “approved” substitute “ a Schedule 3 SAYE option scheme ”,

• (b) in paragraph (b)(i) for “or (4)” substitute “ , (4) or (4A) ”,

• (c) in paragraphs (c), (d) and (f) after sub-paragraph (ii) omit “or” and insert—

(iia) the non-UK company reorganisation arrangement, or

, and

• (d) in paragraph (e) after sub-paragraph (ii) omit “or” and insert—

(iia) the making of any non-UK company reorganisation arrangement which would fall within subsection (3H), or

.

• (4) In subsection (3H)—

• (a) after “arrangement” insert “ or a non-UK company reorganisation arrangement ”, and

• (b) in paragraph (b) for “an approved” substitute “ a Schedule 3 ”.

• (5) In subsection (5)(b)—

• (a) for “paragraph 42(3) provides” substitute “ paragraphs 40H(4) and 40I(9) provide ”,

• (b) for “approved” substitute “ a Schedule 3 SAYE option scheme ”, and

• (c) for “approval of the scheme has been previously withdrawn” substitute “ the scheme is not a Schedule 3 SAYE option scheme ”.

102

Schedule 3 is amended as follows.