Explanatory Note
(This note is not part of the Order)
This Order amends the Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572) (“the principal Order”). The principal Order contains further transitional provisions relating to the new provisions for pension schemes coming into force on 6th April 2006 under Part 4 of the Finance Act 2004 (c. 12).
Article 1 of this Order provides for citation, commencement and interpretation, and article 2 provides for the principal Order to be amended.
Article 3 of this Order provides for the substitution of article 25 of the principal Order. That article, which dealt with stand-alone lump sums, is replaced by five new articles (article 25 and articles 25A to 25D), which also deal with the same subject. Of these new articles, article 25 contains introductory material and defines the expression “stand-alone lump sum”. This expression is defined as a lump sum which meets all the conditions set out in article 25A and is made in one of the circumstances set out in article 25B. Article 25A then sets out the relevant conditions and article 25B the relevant circumstances. Article 25C sets out the tax consequences if a stand-alone lump sum is paid, and article 25D contains further provisions.
Article 4 of this Order provides for the omission of article 26 of the principal Order (dealing with the application of paragraph 31 of Schedule 36 to the Finance Act 2004).
A regulatory impact assessment in respect of the provisions of Part 4 of the Finance Act 2004, as amended by the Finance Act 2005 and the Finance Act 2006 is available on the website of HM Revenue and Customs at www.hmrc.gov.uk/ria/simplifying-pensions.pdf and may be obtained by writing to the Ministerial Correspondence Unit, 1st Floor, HM Revenue and Customs, Ferrers House, PO Box 38, Castle Meadow Road, Nottingham, NG2 1BB.