BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £5, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!
 |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | |
United Kingdom Statutory Instruments |
||
|
You are here: BAILII >> Databases >> United Kingdom Statutory Instruments >> The Pension Protection Fund (Tax) Regulations 2006 No. 575 URL: http://www.bailii.org/uk/legis/num_reg/2006/20060575.html |
||
[New search] [Help]
| Made | 9th March 2006 | ||
| Laid before the House of Commons | 10th March 2006 | ||
| Coming into force | 6th April 2006 |
(2) In these Regulations—
(3) In these Regulations—
Meaning of "the Pension Protection Fund" and other expressions
3.
—(1) In these Regulations—
(2) In England, Wales and Scotland "the Pensions Act levies" means—
(3) In Northern Ireland "the Pensions Act levies" means—
Application of the Tax Acts: general
4.
—(1) The Tax Acts apply in relation to the Pension Protection Fund in the same way as they apply in relation to a registered pension scheme.
(2) The general rule in paragraph (1) is subject to the further provisions contained in these Regulations.
Application of Part 4 of FA 2004: further provisions
5.
Section 151 of FA 2004 (meaning of "member") applies as if, in Part 4, "member" in relation to the Pension Protection Fund, meant—
6.
—(1) Section 152 of FA 2004 (meaning of "arrangement") applies as if, in Part 4, "arrangement", in relation to an individual specified in paragraph (2), meant an arrangement specified in paragraph (3).
(2) An individual is specified for the purposes of this paragraph if the individual—
(3) An arrangement is specified for the purposes of this paragraph if it is an arrangement under which the individual receives (or, as the case may be, expects to receive)—
7.
Chapter 2 of Part 4 (registration of pension schemes) does not apply in relation to the Pension Protection Fund.
8.
Section 164 of FA 2004 (authorised member payments) applies as if it also provided that the Board of the Pension Protection Fund was authorised to make the following payments to or in respect of a member—
9.
—(1) For the purposes of Part 4, payment of periodic compensation from the Pension Protection Fund to an individual is treated as payment of a scheme pension to a member of a registered pension scheme (see section 165 of FA 2004: pension rules).
(2) The payment of such compensation is treated as meeting the condition specified in paragraph 2(2)(a) of Schedule 28 to FA 2004 (condition relating to payer of scheme pension).
10.
—(1) This regulation applies if—
(2) Condition A is that the Board of the Pension Protection Fund is responsible for securing that compensation is (and has been) paid to an individual in accordance with the pension compensation provisions.
(3) Condition B is that the Board of the Pension Protection Fund is required to secure the discharge of liabilities to an individual in respect of benefits transferred to the Board under—
(4) Condition C is that the Board of the Pension Protection Fund provides for the securing of—
by the entry into an annuity contract or a number of such contracts.
(5) For the purposes of Part 4, payment of an annuity under an annuity contract mentioned in paragraph (4) is treated as payment of a scheme pension.
(6) If this regulation applies, so much of Pension rule 4 in section 165(1) of FA 2004 (pension rules) as provides that a scheme pension may only be paid if the member had an opportunity to select a lifetime annuity instead is treated as omitted.
11.
—(1) Section 166 of FA 2004 (lump sum rule) and Part 1 of Schedule 29 to that Act (authorised lump sums: lump sum rule) apply with the following modifications to the payment of lump sums by the Pension Protection Fund to an individual.
(2) Section 166(2) of FA 2004 (time at which a person becomes entitled to a lump sum) applies as if the person becomes entitled to a lump sum when a person acquires an actual (rather than a prospective) right to receive the lump sum.
(3) In Schedule 29 to FA 2004, paragraph 5(1)(a) is treated as omitted.
12.
—(1) For the purposes of Part 4, payment of periodic compensation from the Pension Protection Fund to a dependant of an individual is treated as payment of a dependants' scheme pension in respect of a member of a registered pension scheme (see section 167 of FA 2004: pension death benefit rules).
(2) The payment of such compensation is treated as meeting the condition specified in paragraph 16(2)(a) of Schedule 28 to FA 2004[12] (condition relating to payer of dependants' scheme pension).
13.
—(1) This regulation applies if—
(2) Condition A is that the Board of the Pension Protection Fund is responsible for securing that compensation is (and has been) paid to a dependant of an individual in accordance with the pension compensation provisions.
(3) Condition B is that the Board of the Pension Protection Fund is required to secure the discharge of liabilities to a dependant of an individual in respect of benefits transferred to the Board under—
(4) Condition C is that the Board of the Pension Protection Fund provides for the securing of—
by the entry into an annuity contract or a number of such contracts.
(5) For the purposes of Part 4, payment of an annuity under an annuity contract mentioned in paragraph (4) is treated as payment of a dependants' scheme pension.
(6) If this regulation applies, so much of Pension death benefit rule 3 in section 167(1) of FA 2004 (pension death benefit rules) as provides that a dependants' scheme pension may only be paid if the member or dependant had an opportunity to select a dependants' annuity instead is treated as omitted.
14.
—(1) Section 168 of FA 2004 (lump sum death benefit rule) and Part 2 of Schedule 29 to that Act (authorised lump sums: lump sum death benefit rule) apply to the payment of lump sums by the Pension Protection Fund to a dependant of a qualifying individual.
(2) In paragraph (1) a "qualifying individual" means an individual who was a member of a scheme for which the Board of the Pension Protection Fund has assumed responsibility.
15.
Sections 175 to 181 of FA 2004 (authorised and unauthorised employer payments) do not apply in relation to the Pension Protection Fund.
16.
Sections 182 to 185 of FA 2004 (borrowing) do not apply in relation to the Pension Protection Fund.
17.
—(1) Section 186 of FA 2004 (exemption from tax on certain types of income) applies in relation to each of the Pensions Act Funds as if in subsection (1) for the reference to income tax there were substituted a reference to corporation tax.
(2) The exemption provided by section 186(1) of FA 2004 (as modified by paragraph (1)) in relation to each of the Pensions Act Funds also applies in respect of—
18.
—(1) Any amount recovered by an individual's employer on account of any of the Pensions Act levies is treated in the same way as relievable pension contributions paid during a tax year (see section 188 of FA 2004: relief for contributions).
(2) In paragraph (1) "tax year" has the meaning given by section 279(1) of FA 2004.
19.
Relief on any amount recovered by an individual's employer on account of any of the Pensions Act levies may be given in accordance with section 193 of FA 2004 (relief under net pay arrangements).
20.
Sections 197 and 198 of FA 2004 (spreading of relief) do not apply in relation to any sum paid by an employer on account of any of the Pensions Act levies.
21.
Section 199 of FA 2004 (deemed contributions) applies in relation to any sum paid by an employer on account of any of the Pensions Act levies as it applies in relation to a sum paid by an employer in or towards the discharge of any liability of the employer under the enactments specified in subsection (1) of that section.
22.
Section 213 of FA 2004 (surchargeable unauthorised employer payments) does not apply in relation to the Pension Protection Fund.
23.
—(1) For the purposes of benefit crystallisation event 2 (see the Table in section 216(1) of FA 2004) "P" is the amount of the periodic payments which will be payable to the individual in the period of 12 months beginning with the day on which the individual first becomes entitled to a periodic payment (assuming that it remains payable throughout that period at the rate at which it is payable on that day).
(2) Benefit crystallisation event 2 does not apply if—
(3) For the purposes of benefit crystallisation event 5 "DP" is the annual rate of periodic compensation to which the individual would be entitled if, on the date on which the individual reaches 75, the individual acquired an actual (rather than a prospective) right to receive it.
(4) Subject to the provisions of this regulation, section 216 of FA 2004 (benefit crystallisation events and amounts crystallised) applies to the payment, by the Board of the Pension Protection Fund, of any amount falling within section 166(2) of the Pensions Act or Article 150(2) of the Pensions Order (duty to pay scheme benefits unpaid at assessment date) in the same way as it would apply if that payment had been made by a registered pension scheme.
(5) Schedule 32 to FA 2004 (registered pension schemes: benefit crystallisation events: supplementary) applies to give the meaning of expressions used in this regulation as it applies to give the meaning of expressions used in the Table in section 216(1) of FA 2004 (benefit crystallisation events and amounts crystallised).
24.
Section 242 of FA 2004 (de-registration charge) does not apply in relation to the Pension Protection Fund.
25.
Chapter 6 of Part 4 (schemes that are not registered pension schemes) does not apply in relation to the Pension Protection Fund.
26.
—(1) References in Part 4 to the scheme administrator, in relation to a pension scheme (see section 270 of FA 2004: meaning of "scheme administrator"), are to be treated as references to the scheme administrator of the Pension Protection Fund.
(2) For the purposes of paragraph (1) the "scheme administrator of the Pension Protection Fund" means the person appointed by the Board of the Pension Protection Fund to be responsible for the discharge of the functions conferred or imposed on the scheme administrator of the Pension Protection Fund by and under Part 4.
27.
—(1) If section 272 of FA 2004 (trustees etc. liable as scheme administrator) applies in relation to the Pension Protection Fund, the Board of the Pension Protection Fund assumes liability by reason of that section applying in relation to that Fund.
(2) For the purposes of section 272(4) of FA 2004 (specification of persons assuming liability) the Board of the Pension Protection Fund are treated as persons who assume liability by virtue of being specified under Head 2.
28.
Section 273 of FA 2004 (members liable as scheme administrator) does not apply in relation to the Pension Protection Fund.
29.
—(1) A lifetime allowance enhancement factor may operate in accordance with paragraph 7 of Schedule 36 (primary protection) in relation to all benefit crystallisation events occurring in relation to an individual in the circumstances specified in paragraph (2).
(2) The circumstances are where some or all of the individual's relevant pre-commencement rights are rights under a pension arrangement relating to that individual under a pension scheme for which the Board of the Pension Protection Fund assumes responsibility in accordance with—
(3) This regulation is to be construed as one with paragraph 7 of Schedule 36.
30.
—(1) This regulation applies if there is a transfer to the Board of the Pension Protection Fund of all sums and assets held for the purposes of, or representing accrued rights under, an arrangement relating to an individual under a registered pension scheme.
(2) For the purposes of paragraph 12 of Schedule 36 (enhanced protection) the transfer is treated as a permitted transfer by virtue of sub-paragraph (8)(b) of that paragraph
(3) This regulation is to be construed as one with paragraph 12 of Schedule 36.
31.
—(1) For the purposes of Part 3 of Schedule 36 (pre-commencement benefit rights), the transfer of the property, rights and liabilities of a scheme to the Board of the Pension Protection Fund in accordance with a relevant transfer notice is treated as a block transfer within the meaning given by paragraph 22(6) of Schedule 36.
(2) But for the purposes of determining the compensation payable where the Board of the Pension Protection Fund assumes responsibility for a scheme in accordance with Chapter 3 of Part 2 of the Pensions Act or Chapter 3 of Part 3 of the Pensions Order (pension protection), paragraph (1) does not affect the application of—
(3) In paragraph (1) a "relevant transfer notice" means—
32.
Paragraphs 35 and 36 of Schedule 36 (winding-up lump sums paid by former approved superannuation funds and right to payment of lump sum death benefit) do not apply in relation to the Pension Protection Fund.
Application of the Inheritance Tax Act 1984: further provisions
33.
Section 58 of the Inheritance Tax Act 1984[14] (relevant property) applies in relation to property which is held for the purposes of the Pension Protection Fund as it applies in relation to property which is held for the purposes of a registered pension scheme.
34.
Section 151 of the Inheritance Tax Act 1984[15] (treatment of pension rights) applies in relation to an interest in or under the Pension Protection Fund as it applies in relation to an interest in or under a registered pension scheme.
Application of ICTA: further provisions
35.
—(1) Section 413(3) of ICTA (group relief: interpretation) applies as if it provided that two companies shall be deemed to be members of a group of companies if—
(2) This regulation is to be construed as one with Chapter 4 of Part 10 of ICTA (group relief).
36.
—(1) If the Board of the Pension Protection Fund acquires more than half the ordinary share capital of a company (so that, accordingly, the condition in paragraph (a) of section 769(1) of ICTA[16] is met), there is no change in the ownership of the company for the purposes of sections 767A to 768E of ICTA[17] (change in ownership of company).
(2) This regulation is to be construed as one with sections 767A to 768E of ICTA.
Application of TCGA 1992: further provisions
37.
—(1) For the purposes of section 170 of TCGA 1992 (groups of companies), none of the following may be a member of a group—
(2) This regulation is to be construed as one with TCGA 1992.
38.
—(1) For the purposes of TCGA 1992, any gain accruing to the Board of the Pension Protection Fund from its disposal of investments shall not be a chargeable gain if, or to the extent that, at the time of the disposal, those investments were held by the Board, or on its behalf, for the purposes of one of the Pensions Act Funds.
(2) In paragraph (1) "investments" includes futures contracts and options contracts.
(3) This regulation is to be construed as one with TCGA 1992.
Application of ITEPA 2003: further provisions
39.
Step 5 of section 54(1) of ITEPA 2003 (calculation of deemed employment payment under arrangements made by intermediaries) applies in relation to a payment, by the intermediary, of any sum in respect of any of the Pensions Act levies in the same way as it applies in relation to any contributions that may be deducted under that step.
40.
Section 307 of ITEPA 2003 (exemption from employment income for death or retirement benefit provision made by employer) applies in relation to the payment of any sum in respect of any of the Pensions Act levies in the same way as it applies in respect of provision made by an employee's employer for a retirement or death benefit.
41.
Section 579A of ITEPA 2003[18] (pensions) applies in relation to periodic compensation from the Pension Protection Fund as it applies to any pension under a registered pension scheme.
42.
A lump sum paid under Schedule 7 to the Pensions Act or Schedule 6 to the Pensions Order (pension compensation provisions) is treated as if it were a lump sum paid under a registered pension scheme to which subsection (1) of section 636A of ITEPA 2003[19] (exemption for certain lump sums under registered pension schemes) applied.
Application of the Finance Act 2003: further provisions
43.
—(1) Paragraph 8 of Schedule 4 to the Finance Act 2003[20] (debt as consideration) does not apply in relation to the Pension Protection Fund if—
(2) Paragraph 1 of Schedule 7 to the Finance Act 2003 (group relief) applies in relation to a group of companies of which the Board of the Pension Protection Fund is a member as if, in the case of each reference to 75% , there were substituted a reference to 50% .
(3) For the purposes of paragraph 3(1) of Schedule 7 to the Finance Act 2003 (withdrawal of group relief) there is no withdrawal of group relief if the vendor is the Board of the Pension Protection Fund.
(4) This regulation is to be construed as one with Part 4 of the Finance Act 2003 (stamp duty land tax).
Fraud compensation payments and other related payments
44.
—(1) Receipt of a payment to which this regulation applies shall not be regarded as a disposal of an asset for the purposes of capital gains tax or for the purposes of corporation tax on chargeable gains.
(2) This regulation applies to—
Tom Watson
Vernon Coaker
Two of the Lords Commissioners of Her Majesty's Treasury
9th March 2006
[6] S.I. 2005/255 (N.I. 1).back
[8] Paragraph 15 of Schedule 28 was amended by paragraph 26 of Schedule 10 to the Finance Act 2005.back
[9] Paragraph 16 of Schedule 28 was amended by paragraph 27 of Schedule 10 to the Finance Act 2005.back
[10] The definition of "registered pension scheme" was inserted by paragraph 35(2) of Schedule 35 to the Finance Act 2004.back
[11] Paragraph 2 of Schedule 28 was amended by paragraph 11(3) of Schedule 10 to the Finance Act 2005.back
[12] Paragraph 16(2) of Schedule 28 was amended by paragraph 27(3) of Schedule 10 to the Finance Act 2005.back
[14] 1984 c. 51. By virtue of section 100(1) and (2) of the Finance Act 1986 (c. 41), on and after 25th July 1986 the Capital Transfer Tax Act 1984 may be cited as the Inheritance Tax Act 1984, and any reference in that Act to capital transfer tax is to have effect as a reference to inheritance tax, except where the reference relates to a liability arising before 25th July 1986. Section 58 of the Inheritance Tax Act 1984 was amended by section 203(3) of the Finance Act 2004 (c. 12).back
[15] Section 151 was amended by section 203(4) of the Finance Act 2004.back
[16] Section 769(1) was amended by paragraph 4(2) of Schedule 26 to the Finance Act 1995 (c. 4) and by section 116(5) of and paragraph 32 of Schedule 5 to, the Finance Act 1998 (c. 36).back
[17] Section 767A was inserted by section 135(1) of the Finance Act 1994 (c. 9) and section 768E was inserted by paragraph 4(3) of Schedule 30 to the Finance Act 2002 (c. 23).back
[18] Section 579A was inserted by paragraph 6 of Schedule 31 to the Finance Act 2004.back
[19] Section 636A was inserted by paragraph 11 of Schedule 31 to the Finance Act 2004.back
[22] S.I. 1995/3213 (N.I. 22).back
