Summary
1.Section 48 and the first four parts of Schedule 13 amend Part 4 of Finance Act (FA) 2004 as it relates to employer pensions tax relief by inserting a number of new sections into FA 2004 as well as providing transitional provisions in order to ensure that the amount on which relief is given in respect of a contribution paid by any employer accurately reflects, but does not exceed, the payments received by the registered pension scheme.
2.Specifically, the Schedule will apply to asset-backed contribution (ABC) arrangements used by some employers to fund their registered pension schemes.
3.An ABC arrangement involves offsetting an employer’s legal obligation to pay a pension contribution against the registered pension scheme’s legal obligation to purchase an asset from the employer directly or indirectly, using the contribution. There are also ABC arrangements that involve an upfront monetary contribution.
4.These types of arrangement enable an employer, or a person connected with the employer (hereafter referred to as “the employer etc”), to provide for payments over a period of time (or an income stream) to the pension scheme. A more complex ABC arrangement typically involves a special purpose vehicle (for example, a partnership of which the employer is a member (an employer-related partnership)), in which case the employer provides the pension scheme with the income stream indirectly through the vehicle. The income stream is derived from assets of the employer or a connected party including an employer-related partnership.
5.Part 5 of the Schedule contains minor and related amendments to the structured finance legislation(2), which concerns structured finance arrangements (SFAs).
6.Detail of the commencement provisions applicable to these parts is given in the following sections. References to Parts, sections or paragraphs are references to the Schedule unless otherwise stated. Where a reference to a section can mean a reference to it in Part 1 or Part 3, then a reference to the relevant Part is also given.
This legislation is set out in Chapter 2 of Part 16 Corporation Tax Act 2010 for corporation tax purposes and Chapter 5B of Part 13 Income Tax Act 2007 for income tax purposes.
