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Finance Act 2014

Liabilities of trustees appointed by Pensions Regulator etc

28.Paragraph 17 provides a power for HMRC to make regulations for assessments in respect of any liability under new section 272C.

29.Paragraph 18 provides a consequential change in connection with new section 272C, which is inserted into FA 2004 by paragraph 19.

30.Paragraph 19 inserts new sections 272A to 272C into FA2004.

31.New section 272A ensures that an independent trustee who is appointed as a result of action by the Pensions Regulator does not become liable for specified tax charges that predate their appointment.

32.New subsections 272A(1) and (2) provide when the section applies and in relation to whom.

33.New section 272A(3) defines the date of the “relevant day” in respect of a person P who is an Independent Trustee.

34.New subsection 272A(4) to (6) provide that where the independent trustee (P) becomes a scheme administrator they do not become liable to the tax charges specified in subsection (7) that they would otherwise assume liability for in their capacity as scheme administrator. However, subsection (4) does not apply if P was the scheme administrator before the relevant day, as defined in subsection (3).

35.New subsections 272A(7) to (11) prescribe which tax charges that P does not assume liability for paying, which P otherwise would assume liability for by virtue of being either the scheme administrator, a trustee or a person who controlled the management of the pension scheme.

36.New Section 272B ensures that where a scheme administrator (Q) is appointed when a pension scheme has one or more independent trustees, Q will not become liable to specified tax charges.

37.New subsection 272B(1) provides when the section applies and in relation to whom.

38.New subsections 272B(2) and (3) provide that Q does not assume any liability for those tax charges specified in section 272A(7) that they would otherwise assume by virtue of being either the scheme administrator or a person who controls the management of the pension scheme. Subsection (5) defines the relevant day for the purposes of section 272B, as well as section 272A when it applies for the purposes of new section 272B.

39.New subsection 272B(4) provides that subsections (2) and (3) do not apply where Q was a scheme administrator before the relevant day.

40.New subsection 272B(5) defines the date of the “relevant day” in respect of a person Q, in relation to new section 272B as well as the tax charges prescribed in new section 272A(7) to (11).

41.New section 272C specifies who is liable for those tax charges for which neither P nor Q assume liability by virtue of new sections 272A and 272B.

42.New subsections 272C(1) and (2) prescribe the tax liabilities that the section applies to. New subsection 272C(3) provides that the liability is retained or assumed by  the person or persons who were the scheme administrator immediately before the relevant day in relation to P or Q as appropriate.

43.New subsection 272C(4) provides that if there was no scheme administrator immediately before the relevant day, the liability is retained or assumed by the last scheme administrator before the relevant day.

44.New subsection 272C(5) provides that if there is any conflict between section 271 FA2004 and subsections (3) and (4), then the liability will be as set out in subsections (3) and (4).

45.New subsections 272C(6) and (7) provide that subsection (7) applies if no one assumes the liabilities under subsections (3) or (4) or the persons who do assume the liabilities either can not be traced or are already in serious default.  In such cases, subsection (7) provides that the liability for the tax charges will fall as set out in section 272(4) of FA2004.

46.New subsection 272C(8) provides that where subsection (7) applies HMRC must notify the person of their liability as soon as is reasonably practicable; but failure to do so does not affect the person's liability.

47.New subsection 272C(9) provides that if a person is liable to a tax charge, and this section imposes liability on another person, the first person does not cease to be liable to that tax charge.

48.New section 272C(10) provides that a new scheme administrator appointed after the Pension Regulator’s intervention in the pension scheme has come to an end, takes over responsibility for all the outstanding tax liabilities of the pension scheme.

49.New sections 272C(11) and (12) provide that a scheme administrator, who has assumed liabilities by virtue of new sections 272C(3) and (4), may apply to HMRC to be released from those liabilities and has the right of appeal to an independent tribunal if HMRC refuses the application.

50.Paragraph 20 inserts new subsection (1A) into section 273 of FA2004, which sets out the circumstances in which members of a pension scheme may assume the liability of a scheme administrator. New subsection (1A) extends section 273 to include cases where a person other than the member had assumed liability for a tax charge under sections 239 and 241(1)(b) or (c) of FA2004 by virtue of section 272C, but has failed to pay the tax due and has either died or ceased to exist or HMRC considers the failure to pay the tax is of a serious nature.

51.Paragraph 21 makes consequential changes to section 274 of FA2004.

52.Paragraph 22 provides that new sections 272A to 272C, which act in relation to liabilities arising before Independent Trustees are appointed, do not apply

  • In relation to a person P, who is an Independent Trustee, unless P is first appointed on or after 1 September 2014, and

  • in relation to a person Q, who is a scheme administrator, unless the scheme in question first had an independent trustee on or after 1 September 2014.

53.Paragraph 23 amends sections 169(5), 257(4), 261(1) and 264(2) of FA2004 to replace ‘incorrect’ with ‘inaccurate’, to ensure consistency in Part 4 of FA 2004.

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