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Income Tax (Earnings and Pensions) Bill


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

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 591   Taxable pension income

If section 590 applies, the taxable pension income for a tax year is the full

amount of the annuity paid in that year.

 592   Person liable for tax

If section 590 applies, the person liable for any tax charged under this Part is

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the person receiving or entitled to the annuity.

Unauthorised payments

 593   Unauthorised payments: application of section 583

     (1)    Section 583 applies to a payment if—

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

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former approved superannuation fund (“the paying fund”), but

           (b)           it is not expressly authorised—

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

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

           (c)           conditions B and C in section 583(4) and (5) are met.

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     (2)    But section 583 does not apply to a payment to which section 623 applies.

     (3)    In this section “payment” includes—

           (a)           a transfer of assets, and

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

     (4)    If section 583 applies to a payment by virtue of this section, sections 584, 585

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and 588 apply accordingly.

Interpretation

 594   Meaning of “former approved superannuation fund”

     (1)    In this Chapter “former approved superannuation fund” means any fund

which immediately before 6th April 1980 was an approved superannuation

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fund for the purposes of section 208 of ICTA 1970.

     (2)    But a fund is not a former approved superannuation fund if any of the

following things has happened since 5th April 1980—

           (a)           the fund has been approved by the Board of Inland Revenue for the

purposes of Chapter 2 of Part 2 of FA 1970,

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           (b)           the fund has been approved by the Board for the purposes of Chapter

1 of Part 14 of ICTA, or

           (c)           any sum has been paid to the fund by way of contribution.

 

 

Income Tax (Earnings and Pensions) Bill
Part 9 — Pension income
Chapter 8 — Approved personal pension schemes

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Chapter 8

Approved personal pension schemes

Annuities

 595   Annuities

This section applies to any annuity acquired using funds held for the purposes

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of an approved personal pension scheme.

 596   Taxable pension income

If section 595 applies, the taxable pension income for a tax year is the full

amount of the annuity received in that year.

 597   Person liable for tax

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If section 595 applies, the person liable for any tax charged under this Part is

the person receiving or entitled to the annuity.

Income withdrawals

 598   Income withdrawals

This section applies to any income withdrawal under approved personal

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pension arrangements.

 599   Taxable pension income

If section 598 applies, the taxable pension income for a tax year is the total

amount of the income withdrawals made in that year.

 600   Person liable for tax

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If section 598 applies, the person liable for any tax charged under this Part is

the person receiving or entitled to the income.

Unauthorised personal pension payments

 601   Unauthorised personal pension payments

     (1)    This section applies to any unauthorised personal pension payment.

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     (2)    In this section “personal pension payment” means a payment which—

           (a)           is made out of funds which are or have been held for the purposes of a

personal pension scheme (“the paying scheme”), and

           (b)           is made to or for the benefit of an individual who has made personal

pension arrangements in accordance with the paying scheme (“the

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individual’s arrangements”).

     (3)    For the purposes of this section a personal pension payment is unauthorised if

any of conditions A, B and C are met.

 

 

Income Tax (Earnings and Pensions) Bill
Part 9 — Pension income
Chapter 9 — Retirement annuity contracts

    290

 

     (4)    Condition A is that—

           (a)           the paying scheme and the individual’s arrangements are both

approved at the time the payment is made, but

           (b)           the payment is not expressly authorised by the rules of the paying

scheme.

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     (5)    Condition B is that—

           (a)           the paying scheme is not approved at the time the payment is made,

and

           (b)           at the time the scheme was last approved, the payment would not have

been expressly authorised under the scheme’s rules.

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     (6)    Condition C is that—

           (a)           the individual’s arrangements are not approved at the time the

payment is made, and

           (b)           at the time the arrangements were last approved, the payment would

not have been expressly authorised under the arrangements.

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     (7)    In this section “payment” includes—

           (a)           a transfer of assets, and

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

 602   Taxable pension income

If section 601 applies, the taxable pension income for a tax year is the total

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amount or value of the payments made in that year.

 603   Person liable for tax

If section 601 applies, the person liable for any tax charged under this Part is

the individual who made the arrangements mentioned in section 601(2)(b) to

whom or for whose benefit the payment is made, whether or not the individual

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is the recipient of the payment.

Interpretation

 604   Meaning of “personal pension scheme” and related expressions

In this Chapter the following expressions have the same meaning as in Chapter

4 of Part 14 of ICTA (see section 630(1) of ICTA)—

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           (a)           “approved”;

           (b)           “income withdrawal”;

           (c)           “personal pension arrangements”;

           (d)           “personal pension scheme”.

Chapter 9

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Retirement annuity contracts

 605   Annuities

This section applies to any annuity paid under a retirement annuity contract.

 

 

Income Tax (Earnings and Pensions) Bill
Part 9 — Pension income
Chapter 10 — Other employment-related annuities

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 606   Meaning of “retirement annuity contract”

In this Chapter “retirement annuity contract” means—

           (a)           an annuity contract or a trust scheme approved by the Board of Inland

Revenue under section 620 of ICTA (qualifying premiums) or under

section 621 of ICTA (other approved contracts), or

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           (b)           a substituted contract within the meaning of section 622(3) of ICTA

(substituted retirement annuity contracts).

 607   Taxable pension income

If section 605 applies, the taxable pension income for a tax year is the full

amount of the annuity arising in that year.

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 608   Person liable for tax

If section 605 applies, the person liable for any tax charged under this Part is

the person receiving or entitled to the annuity.

Chapter 10

Other employment-related annuities

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 609   Annuities for the benefit of dependants

     (1)    This section applies to any annuity which was granted for consideration

consisting in whole or in part of sums which satisfied the conditions for relief

under section 273 of ICTA (obligatory contributions to secure an annuity for

the benefit of dependants).

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     (2)    But this section applies to an annuity which arises from a source outside the

United Kingdom only if it is paid to a person resident in the United Kingdom.

 610   Annuities under sponsored superannuation schemes

     (1)    This section applies to—

           (a)           any annuity paid under a sponsored superannuation scheme, and

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

superannuation scheme.

     (2)    But this section applies to an annuity which arises from a source outside the

United Kingdom only if it is paid to a person resident in the United Kingdom.

     (3)    This section does not apply to an annuity to which any provision of Chapter 6,

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7, 8 or 9 of this Part applies.

     (4)    In this section “sponsored superannuation scheme” has the meaning given by

section 624(1) of ICTA.

 611   Annuities in recognition of another’s services

     (1)    This section applies to any annuity purchased by any person in recognition of

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another person’s services in any office or employment.

 

 

Income Tax (Earnings and Pensions) Bill
Part 9 — Pension income
Chapter 11 — Certain overseas government pensions paid in the UK

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     (2)    But this section applies to an annuity which arises from a source outside the

United Kingdom only if it is paid to a person resident in the United Kingdom.

     (3)    This section does not apply to an annuity to which any provision of Chapter 6,

7, 8 or 9 of this Part applies.

     (4)    For the purposes of this section “office” includes in particular any position

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which has an existence independent of the person who holds it and may be

filled by successive holders.

 612   Taxable pension income: UK annuities

     (1)    The taxable pension income for an annuity to which section 609, 610 or 611

applies is determined in accordance with this section if the annuity arises from

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a source in the United Kingdom.

     (2)    The taxable pension income for a tax year is the full amount of the annuity

arising in that year.

 613   Taxable pension income: foreign annuities

     (1)    The taxable pension income for an annuity to which section 609, 610 or 611

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applies is determined in accordance with this section if the annuity arises from

a source outside the United Kingdom.

     (2)    The taxable pension income for a tax year is the amount on which tax would be

chargeable if the annuity were charged to tax under Case V of Schedule D for

that year (see in particular the provisions of ICTA listed in subsection (3)).

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     (3)    Those provisions of ICTA are—

           (a)           sections 65 and 68 (calculation of the amount of the income on which

tax is to be charged in the tax year);

           (b)           section 584 (relief for unremittable overseas income);

           (c)           section 585 (relief on delayed remittances).

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     (4)    In the application of sections 65(2) and 585(2) of ICTA in relation to the

calculation of the taxable pension income for the purposes of this section, any

reference to income arising from a pension is a reference to the annuity.

 614   Person liable for tax

If section 609, 610 or 611 applies, the person liable for any tax charged under

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this Part is the person receiving or entitled to the annuity.

Chapter 11

Certain overseas government pensions paid in the UK

 615   Certain overseas government pensions paid in the United Kingdom

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

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     (2)    Condition A is that the pension—

           (a)           is payable—

 

 

Income Tax (Earnings and Pensions) Bill
Part 9 — Pension income
Chapter 12 — House of Commons Members’ Fund

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                  (i)                 to a person who has been employed in overseas government

service, or

                  (ii)                to the widow, widower, child, relative or dependant of a person

who has been employed in overseas government service, and

           (b)           is payable in respect of that service.

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     (3)    Condition B is that the pension—

           (a)           is payable in the United Kingdom, and

           (b)           is payable to a person who is resident in the United Kingdom.

     (4)    Condition C is that the pension is payable by or on behalf of the government

of—

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           (a)           a country which forms part of Her Majesty’s dominions,

           (b)           any other country which is for the time being mentioned in Schedule 3

to the British Nationality Act 1981 (c. 61), or

           (c)           any territory under Her Majesty’s protection.

     (5)    But condition C is not met if the pension is payable out of the public revenue

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of the United Kingdom or Northern Ireland.

     (6)    In condition A the references to a person being employed in overseas

government service are to the person being employed outside the United

Kingdom—

           (a)           in the service of the Crown, or

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           (b)           in service under the government of a country or territory which falls

within subsection (4).

     (7)    In this Chapter “pension” includes a pension which is paid voluntarily or is

capable of being discontinued.

 616   Taxable pension income

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If section 615 applies, the taxable pension income for a tax year is the full

amount of the pension accruing in that year irrespective of when any amount

is actually paid.

 617   Deduction allowed from taxable pension income

A deduction of 10% is allowed from an amount of taxable pension income

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determined under section 616 (see section 567).

 618   Person liable for tax

If section 615 applies, the person liable for any tax charged under this Part is

the person receiving or entitled to the pension.

Chapter 12

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House of Commons Members’ Fund

 619   The House of Commons Members’ Fund

This section applies to any periodical payment granted out of—

           (a)           the House of Commons Members’ Fund,

 

 

Income Tax (Earnings and Pensions) Bill
Part 9 — Pension income
Chapter 13 — Return of surplus employee additional voluntary contributions

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           (b)           sums appropriated from that Fund, or

           (c)           income from sums appropriated from that Fund.

 620   Meaning of “House of Commons Members’ Fund”

In this Chapter “House of Commons Members’ Fund” means the fund with

that name established by section 1 of the House of Commons Members’ Fund

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Act 1939 (c. 49).

 621   Taxable pension income

If section 619 applies, the taxable pension income for a tax year is the total

amount of the payments made in that year.

 622   Person liable for tax

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If section 619 applies, the person liable for any tax charged under this Part is

the person receiving or entitled to the payments.

Chapter 13

Return of surplus employee additional voluntary contributions

 623   Return of surplus employee additional voluntary contributions

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

     (2)    Condition A is that the payment is made out of funds which are or have been

held for the purposes of—

           (a)           a scheme which is or has been an exempt approved scheme, or

           (b)           a relevant statutory scheme established under a public general Act.

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     (3)    Condition B is that the payment is made under a duty to return surplus funds.

     (4)    Condition C is that the payment is made to or for the benefit of an employee.

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

           (a)           section 598 or 599 of ICTA, or

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

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     (6)    In this section “payment” includes—

           (a)           a transfer of assets, and

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

 624   Taxable pension income

If section 623 applies, the taxable pension income for a tax year is the amount

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equal to the total amount or value of the payments made in that year, grossed

up by reference to the basic rate for that year.

 

 

 
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