Finance Act 2004

Member payment charges

3 (1) The member payment provisions do not apply in relation to a payment made (or treated by this Part as made) to or in respect of a relieved member of a relevant non-UK scheme unless the payment is referable to the member’s UK tax-relieved fund under the scheme.

(2) A member’s UK tax-relieved fund under a relevant non-UK scheme is so much of—

(a) the sums or assets held for the purposes of, or representing accrued rights under, the scheme as, in accordance with regulations made by the Board of Inland Revenue, represents

(b) any tax-relieved contributions made under the scheme by or on behalf of, or in respect of, the member and any tax-exempt provision made under the scheme in relation to the member.

(3) “Tax-relieved contributions” means contributions in respect of which relief from tax—

(a) has been given by virtue of Schedule 33 (overseas pension schemes: migrant member relief), or

(b) has been given at any time after 5th April 2006 under double tax arrangements.

(4) “Tax-exempt provision” means provision in respect of which exemption from tax has been given by virtue of section 307 of ITEPA 2003 (exemption for provision made by employer for retirement or death benefit) at any time after 5th April 2006 when the scheme was an overseas pension scheme.

(5) Regulations under sub-paragraph (2) may (in particular) provide that the sums or assets which represent any tax-relieved contributions or tax-exempt provision are to be determined otherwise than by reference to the actual amount of the contributions or the amount or value of the provision (for instance by reference to the increase in the value of the member’s rights under the scheme during a period for which relief or exemption in respect of such contributions or provision was given).

(6) Regulations made by the Board of Inland Revenue may make provision for determining whether or not payments made (or treated as made) by a relevant non-UK scheme are to be treated as referable to a member’s UK tax-relieved fund under the scheme (and so whether or not they reduce the fund).