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Income Tax (Earnings and Pensions) Bill


Income Tax (Earnings and Pensions) Bill
Part 9 — Pension income
Chapter 5 — United Kingdom social security pensions

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Chapter 5

United Kingdom social security pensions

 577   United Kingdom social security pensions

     (1)    This section applies to—

                    the state pension,

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                    graduated retirement benefit,

                    industrial death benefit,

                    widowed mother’s allowance,

                    widowed parent’s allowance, and

                    widow’s pension.

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     (2)    In this section—

                    “state pension” means any pension payable under—

                  (a)                 section 44, 48A, 48B, 48BB, 51 or 78 of SSCBA 1992, or

                  (b)                  section 44, 48, 48B, 48BB, 51 or 78 of SSCB(NI)A 1992;

                    “graduated retirement benefit” means any benefit payable under—

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                  (a)                 section 36 or 37 of the National Insurance Act 1965 (c. 51), or

                  (b)                 section 35 or 36 of the National Insurance Act (Northern

Ireland) 1966 (c. 6 (N.I.));

                    “industrial death benefit” means any benefit payable under—

                  (a)                 section 94 of, and Part 6 of Schedule 7 to, SSCBA 1992, or

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                  (b)                 section 94 of, and Part 6 of Schedule 7 to, SSCB(NI)A 1992;

                    “widowed mother’s allowance” means any allowance payable under—

                  (a)                 section 37 of SSCBA 1992, or

                  (b)                 section 37 of SSCB(NI)A 1992;

                    “widowed parent’s allowance” means any allowance payable under—

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                  (a)                 section 39A of SSCBA 1992, or

                  (b)                 section 39A of SSCB(NI)A 1992;

                    “widow’s pension” means any pension payable under—

                  (a)                 section 38 of SSCBA 1992, or

                  (b)                 section 38 of SSCB(NI)A 1992.

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     (3)    In subsection (2), in paragraph (b) of the definition of state pension, the

reference to section 48 of SSCB(NI)A 1992 is a reference to the section 48

inserted by paragraph 3(1) of Schedule 2 to the Pensions (Northern Ireland)

Order 1995 (S.I. 1995/3213 (N.I. 22)).

     (4)    Chapter 17 of this Part provides a partial exemption for a pension to which this

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section applies in respect of any part of the pension which is attributable to an

increase in respect of a child (see section 645).

 578   Taxable pension income

If section 577 applies, the taxable pension income for a tax year is the full

amount of the pension, benefit or allowance accruing in that year irrespective

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of when any amount is actually paid.

 

 

Income Tax (Earnings and Pensions) Bill
Part 9 — Pension income
Chapter 6 — Approved retirement benefits schemes

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 579   Person liable for tax

If section 577 applies, the person liable for any tax charged under this Part is

the person receiving or entitled to the pension, benefit or allowance.

Chapter 6

Approved retirement benefits schemes

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Pensions and annuities

 580   Pensions and annuities

This section applies to—

           (a)           any pension or annuity paid under a retirement benefits scheme which

is either approved or being considered for approval, and

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           (b)           any annuity acquired using funds held for the purposes of a retirement

benefits scheme which is either approved or being considered for

approval.

 581   Taxable pension income

If section 580 applies, the taxable pension income for a tax year is the full

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amount of the pension or annuity accruing in that year irrespective of when

any amount is actually paid.

 582   Person liable for tax

If section 580 applies, the person liable for any tax charged under this Part is

the person receiving or entitled to the pension or annuity.

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Unauthorised payments

 583   Unauthorised payments

     (1)    This section applies to a payment if conditions A, B and C are met.

     (2)    But this section does not apply to a payment to which section 623 applies.

     (3)    Condition A is that the payment—

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           (a)           is made out of funds which are held for the purposes of an approved

retirement benefits scheme (“the paying scheme”), but

           (b)           is not expressly authorised—

                  (i)                 by the rules of the paying scheme, or

                  (ii)                by virtue of paragraph 33 of Schedule 6 to FA 1989.

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     (4)    Condition B is that the payment is not made in the course of payment of a

pension or annuity.

     (5)    Condition C is that the payment is made to or for the benefit of—

           (a)           an employee, or

           (b)           an ex-spouse of an employee.

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     (6)    A payment to which this section applies is not to be charged to tax under—

 

 

Income Tax (Earnings and Pensions) Bill
Part 9 — Pension income
Chapter 6 — Approved retirement benefits schemes

    286

 

           (a)           section 598 or 599 of ICTA, or

           (b)           the Regulations mentioned in paragraph 8 of Schedule 3 to FA 1971.

     (7)    In this section “payment” includes—

           (a)           a transfer of assets, and

           (b)           any other transfer of money’s worth.

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 584   Taxable pension income

If section 583 applies, the taxable pension income for a tax year is the total

amount or value of the payments made in that year.

 585   Person liable for tax

If section 583 applies, the person liable for any tax charged under this Part is

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the person mentioned in condition C in section 583(5) to whom, or for whose

benefit, the payment is made.

Interpretation etc.

 586   Meaning of “retirement benefits scheme” etc.

     (1)    In this Chapter—

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                    “retirement benefits scheme” has the meaning given in section 611 of

ICTA;

                    “approved”, in relation to such a scheme, means that the scheme is

approved by the Board of Inland Revenue for the purposes of—

                  (a)                 Chapter 2 of Part 2 of FA 1970, or

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                  (b)                 Chapter 1 of Part 14 of ICTA.

     (2)    Any reference in this Chapter to a pension or annuity paid under a retirement

benefits scheme includes a reference to a pension or annuity paid under a

contract which—

           (a)           is made for purposes of the scheme, and

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           (b)           is made between—

                  (i)                 the administrator of the scheme,

                  (ii)                the employer, or

                  (iii)               the employee or an ex-spouse of the employee,

                         and a third party.

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     (3)    In subsection (2) the reference to the employer is a reference to the person who

is the employer in relation to the scheme.

     (4)    In subsection (2)(b)(i) “administrator of the scheme” is to be construed in

accordance with section 611AA of ICTA.

     (5)    References in this Chapter to approved retirement benefits schemes are

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extended by section 587 (marine pilots’ benefit fund).

 587   Application to marine pilots’ benefit fund

     (1)    In this Chapter the expression “approved retirement benefits scheme” includes

a marine pilots’ benefit fund which is approved by the Board of Inland

 

 

Income Tax (Earnings and Pensions) Bill
Part 9 — Pension income
Chapter 7 — Former approved superannuation funds

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     (1)    Revenue under section 607 of ICTA for the purposes of Chapter 1 of Part 14 of

ICTA.

     (2)    In any case where the paying scheme for the purposes of section 583(3) is a

pilots’ benefit fund, the references in section 583(5) to an employee are to be

read as references to a member or former member of the fund.

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     (3)    In this section “marine pilots’ benefit fund” means—

           (a)           a fund established under section 15(1)(i) of the Pilotage Act 1983 (c. 21),

or

           (b)           any scheme supplementing or replacing any such fund.

 588   Meaning of “employee” and “ex-spouse”

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     (1)    In this Chapter—

                    “employee”—

                  (a)                 includes a person who is to be, or has been, an employee, and

                  (b)                 in relation to a company, includes any officer or director of the

company and any other person taking part in the management

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of the affairs of the company;

                    “ex-spouse” means a party to a marriage which has been dissolved or

annulled and, in relation to any person, means the other party to a

marriage with that person which has been dissolved or annulled

     (2)    For the purposes of the definition of “employee” in subsection (1), “director”,

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in relation to a company, includes—

           (a)           in the case of a company the affairs of which are managed by a board

of directors or similar body, a member of that board or body,

           (b)           in the case of a company the affairs of which are managed by a single

director or similar person, that person,

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           (c)           in the case of a company the affairs of which are managed by the

members themselves, a member of that company;

            and includes a person who is to be or has been a director.

 589   Regulations

The Board of Inland Revenue may make regulations generally for the purpose

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of carrying the preceding provisions of this Chapter into effect.

Chapter 7

Former approved superannuation funds

Annuities

 590   Annuities

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This section applies to—

           (a)           any annuity paid under a former approved superannuation fund, and

           (b)           any annuity acquired using funds held for the purposes of a former

approved superannuation fund.

 

 

 
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Revised 17 February 2003