Finance Act 2006

4After that section insert—E+W+S+N.I.

151APerson dying with alternatively secured pension fund

(1)This section applies where a member of a registered pension scheme has an alternatively secured pension fund in respect of an arrangement under the pension scheme immediately before his death.

(2)In determining for the purposes of this Act the value of his estate immediately before his death he shall be treated as if he had been beneficially entitled to property with a value equal to the relevant amount.

(3)The relevant amount is—

(a)the aggregate of the amount of the sums and the value of the assets forming part of the member's alternatively secured pension fund immediately before his death, less

(b)the aggregate of the amount of the sums and the value of the assets expended on dependants' benefits within the period of six months beginning with the end of the month in which his death occurs.

(4)For this purpose sums or assets are expended on dependants' benefits at any time if they (or sums or assets directly or indirectly deriving from them) are at that time—

(a)applied towards the provision of a dependants' scheme pension for a relevant dependant,

(b)applied towards the provision of a dependants' annuity for a relevant dependant,

(c)designated as available for the payment of dependants' unsecured pension to a relevant dependant, or

(d)designated as available for the payment of dependants' alternatively secured pension to a relevant dependant,

or if the sums (or sums directly or indirectly deriving from the sums or assets) are at that time paid as a charity lump sum death benefit.

(5)In this section—

  • alternatively secured pension fund” has the same meaning as in Part 4 of the Finance Act 2004 (see paragraph 11 of Schedule 28 to that Act);

  • charity lump sum death benefit” has the meaning given by paragraph 18 of Schedule 29 to that Act;

  • dependants' alternatively secured pension” has the meaning given by paragraph 19 of Schedule 28 to that Act;

  • dependants' annuity” has the same meaning as in Part 4 of that Act (see paragraph 17 of that Schedule);

  • dependants' scheme pension” has the same meaning as in that Part of that Act (see paragraph 16 of that Schedule);

  • dependants' unsecured pension” has the meaning given by paragraph 18 of that Schedule; and

  • relevant dependant”, in relation to a member of a registered pension scheme who dies, means a dependant (within the meaning of paragraph 15 of that Schedule) who—

    (a)

    is the person's spouse or civil partner immediately before his death; or

    (b)

    is financially dependent on the person at that time.

151BRelevant dependant with pension fund inherited from member over 75

(1)This section applies where—

(a)a relevant dependant of a person who, immediately before his death, was a member of a registered pension scheme has a dependant's unsecured pension fund, or a dependant's alternatively secured pension fund, in respect of an arrangement under the pension scheme immediately before his death or immediately before ceasing to be a relevant dependant of the member,

(b)the member had reached the age of 75 at the time of his death and had an alternatively secured pension fund in respect of an arrangement under the pension scheme immediately before his death, and

(c)sums or assets forming part of that fund were designated as available for the payment of dependants' unsecured pension, or dependants' alternatively secured pension, to the relevant dependant within the period of six months beginning with the end of the month in which the member's death occurs.

(2)Where this section applies tax shall be charged under this section.

(3)The amount on which tax is charged under this section shall be the aggregate of the amount of the sums and the value of the assets forming part of the dependant's unsecured pension fund, or the dependant's alternatively secured pension fund, in respect of the arrangement immediately before the relevant dependant died or ceased to be a relevant dependant of the member.

(4)But where tax is chargeable under this section by reason of the death of the relevant dependant, that amount is reduced by so much of sums forming part of the dependant's unsecured pension fund, or the dependant's alternatively secured pension fund, (or sums directly or indirectly deriving from sums or assets forming part of that fund) as are paid to a charity within the period of six months beginning with the end of the month in which his death occurs.

(5)Tax charged under this section shall be charged at the rate or rates at which it would have been charged on the death of the member if—

(a)the amount mentioned in subsection (3) above (as reduced under subsection (4) above) had been included in the value transferred by the chargeable transfer made on his death, and

(b)the amount on which the tax is charged had formed the highest part of that value.

(6)In this section—

  • alternatively secured pension fund” has the same meaning as in Part 4 of the Finance Act 2004 (see paragraph 11 of Schedule 28 to that Act);

  • dependants' alternatively secured pension” has the meaning given by paragraph 19 of that Schedule;

  • dependant's alternatively secured pension fund” has the same meaning as in that Part of that Act (see paragraph 25 of that Schedule);

  • dependants' unsecured pension” has the meaning given by paragraph 18 of that Schedule;

  • dependant's unsecured pension fund” has the same meaning as in that Part of that Act (see paragraph 22 of that Schedule); and

  • relevant dependant”, in relation to a member of a registered pension scheme who dies, means a dependant (within the meaning of paragraph 15 of that Schedule) who—

    (a)

    is the person's spouse or civil partner immediately before his death; or

    (b)

    is financially dependent on the person at that time.

151CDependant dying with other pension fund

(1)This section applies where—

(a)a dependant of a member of a registered pension scheme has a dependant's alternatively secured pension fund in respect of an arrangement under the pension scheme immediately before his death, and

(b)section 151B above does not apply.

(2)In determining for the purposes of this Act the value of the dependant's estate immediately before his death he shall be treated as if he had been beneficially entitled to property with a value equal to the relevant amount.

(3)The relevant amount is—

(a)the aggregate of the amount of the sums and the value of the assets forming part of the dependant's alternatively secured pension fund immediately before his death, less

(b)so much of sums forming part of the dependant's alternatively secured pension fund (or sums directly or indirectly deriving from sums or assets forming part of that fund) as are paid as a charity lump sum death benefit within the period of six months beginning with the end of the month in which his death occurs.

(4)In this section—

  • charity lump sum death benefit” has the meaning given by paragraph 18 of Schedule 29 to the Finance Act 2004;

  • dependant” has the meaning given by paragraph 15 of that Schedule 28 to that Act; and

  • dependant's alternatively secured pension fund” has the same meaning as in Part 4 of that Act (see paragraph 25 of Schedule 28 to that Act).