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Finance Act 1989

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This is the original version (as it was originally enacted).

5(1)Section 644 (meaning of relevant earnings) shall be amended as follows.

(2)In subsection (2) for “(5)” there shall be substituted “(6F)”.

(3)The following subsections shall be inserted after subsection (6)—

(6A)Emoluments of an individual as an employee of a company are not income within subsection (2) above if—

(a)he is a controlling director of the company at any time in the year of assessment in question or has been a controlling director of the company at any time in the ten years immediately preceding that year of assessment, and

(b)any of subsections (6B) to (6E) below applies in his case.

(6B)This subsection applies in the case of the individual if—

(a)at any time in the year of assessment in question he is in receipt of benefits under a relevant superannuation scheme, and

(b)the benefits are payable in respect of past service with the company.

(6C)This subsection applies in the case of the individual if—

(a)at any time in the year of assessment in question he is in receipt of benefits under a personal pension scheme,

(b)the scheme has received a transfer payment relating to him from a relevant superannuation scheme, and

(c)the transfer payment is in respect of past service with the company.

(6D)This subsection applies in the case of the individual if—

(a)at any time in the year of assessment in question he is in receipt of benefits under a relevant superannuation scheme,

(b)the benefits are payable in respect of past service with another company,

(c)the emoluments are for a period during which the company mentioned in subsection (6A) above has carried on a trade or business previously carried on by the other company, and

(d)the other company carried on the trade or business at any time during the period of service in respect of which the benefits are payable.

(6E)This subsection applies in the case of the individual if—

(a)at any time in the year of assessment in question he is in receipt of benefits under a personal pension scheme,

(b)the scheme has received a transfer payment relating to him from a relevant superannuation scheme,

(c)the transfer payment is in respect of past service with another company,

(d)the emoluments are for a period during which the company mentioned in subsection (6A) above has carried on a trade or business previously carried on by the other company, and

(e)the other company carried on the trade or business at any time during the period of service in respect of which the transfer payment was made.

(6F)For the purposes of subsections (6A) to (6E) above—

(a)a person is a controlling director of a company if he is a director (as defined by section 612(1)), and he is within paragraph (b) of section 417(5), in relation to the company;

(b)“relevant superannuation scheme” has the same meaning as in section 645(1);

(c)references to benefits payable in respect of past service with a company include references to benefits payable partly in respect of past service with the company; and

(d)references to a transfer payment in respect of past service with a company include references to a transfer payment partly in respect of past service with the company.

(4)This paragraph shall be deemed to have come into force on 6th April 1989.

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