4.—(1) This regulation applies to determine to which part of a relevant non-UK scheme a payment to, or in respect of, a member [F1made before 6th April 2017] is referable.
(2) It shall be assumed that—
(a)payments made by the scheme to or in respect of the member are made out of the member’s UK tax-relieved fund in priority to any other fund under that scheme; and
(b)the amount of the member’s UK tax-relieved fund is reduced [F2(but not below nil)] by the amount paid out of the scheme.
(3) If the member’s UK tax-relieved fund is nil, or has been reduced to nil, [F3the following Rules apply (with an earlier Rule applying in preference to a later Rule).
Rule 1
Where an unauthorised payment is treated as made by the scheme to the transfer member by virtue of section 174A—
the payment shall be treated as made out of the member’s RTF and TATF, but
the interest in taxable property, in respect of which the unauthorised payment is treated as made, shall represent the payment and form part of the member’s RTF and TATF (an “appropriated asset”), up to an amount equal to the amount of that payment.
Rule 2
Accordingly, if a scheme transfers that appropriated asset (or an interest in a vehicle through which the scheme holds the interest in the taxable property indirectly), or part of it, to another pension scheme, that transfer shall be treated as a transfer of the whole or part, as the case may be, of the member’s RTF and TATF (limited to the amount of the unauthorised payment) to that other scheme, falling (if appropriate) within regulation 3A(1)(b).
Rule 3
If a scheme disposes of (other than to another pension scheme) an appropriated asset (or an interest in a vehicle through which the scheme holds the interest in the taxable property indirectly), or part of it, any other property which directly or indirectly represents proceeds of either of those interests (limited to the amount of the unauthorised payment) shall form part of the member’s RTF and TATF.
Rule 4
This Rule applies to payments made by the scheme to or in respect of the member, other than—
a transfer of an interest in taxable property or an interest in a vehicle through which the scheme holds the interest in the taxable property indirectly, and
payments treated as made by virtue of section 174A.
So far as the member’s RTF and TATF are not represented by appropriated assets—
where the member has both an RTF and a TATF, and the amount of his RTF exceeds the amount of his TATF, such payments shall, to the extent of that excess, be treated as made out of his RTF (but not his TATF) and as reducing the RTF, and subject thereto
such payments are made out of the member’s RTF and TATF in priority to any other fund under that scheme, and reduce (but not below nil) the amount of the RTF and TATF.]
[F4(3A) If both the member’s UK tax-relieved fund and RTF are nil, or have been reduced to nil, the following Rules apply (with an earlier Rule applying in preference to a later Rule), subject to the provisions in paragraph (3B).
Rule 1
Where an unauthorised payment is treated as made by the scheme to the transfer member by virtue of section 174A—
(a)the payment shall be treated as made out of the member’s RFTF and RFTATF, but
(b)the interest in taxable property, in respect of which the unauthorised payment is treated as made, shall represent the payment and form part of the member’s RFTF and RFTATF (an “appropriated asset”), up to an amount equal to the amount of that payment.
Rule 2
Accordingly, if a scheme transfers that appropriated asset (or an interest in a vehicle through which the scheme holds the interest in the taxable property indirectly), or part of it, to another pension scheme, that transfer shall be treated as a transfer of the whole or part, as the case may be, of the member’s RFTF and RFTATF (limited to the amount of the unauthorised payment) to that other scheme, falling (if appropriate) within regulation 3C(b).
Rule 3
If a scheme disposes of (other than to another pension scheme) an appropriated asset (or an interest in a vehicle through which the scheme holds the interest in the taxable property indirectly), or part of it, any other property which directly or indirectly represents proceeds of either of those interests (limited to the amount of the unauthorised payment) shall form part of the member’s RFTF and RFTATF.
Rule 4
This rule applies to payments made by the scheme to or in respect of the member, other than—
(a)a transfer of an interest in taxable property or an interest in a vehicle through which the scheme holds the interest in the taxable property indirectly, and
(b)payments treated as made by virtue of section 174A.
So far as the member’s RFTF and RFTATF are not represented by appropriated assets—
(a)where the member has both an RFTF and RFTATF, and the amount of their RFTF exceeds the amount of his RFTATF, such payments shall, to the extent of that excess, be treated as made out of their RFTF (but not their RFTATF) and as reducing the RFTF, and subject thereto
(b)such payments are made out of the member’s RFTF and RFTATF in priority to any other fund under that scheme, and reduce (but not below nil) the amount of the RFTF and RFTATF.
(3B) Where a member has more than one RFTF under the RNUKS, paragraph (3A) applies in order of priority from the RFTF with the earliest key date to the RFTF with the latest key date.]
[F5(4) In [F6paragraphs (3) and (3A)], references to payments made or treated as made by virtue of section 174A include references to payments treated as made by regulations under paragraph 37 of Schedule 29A, or paragraph 7A of Schedule 34, to the Act.]
Textual Amendments
F1Words in reg. 4(1) inserted (retrospective to 9.3.2017) by The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) (Amendment) Regulations 2018 (S.I. 2018/373), regs. 1, 2, 7(a)
F2Words in Reg. 4(2)(b) inserted (retrospective to 6.4.2006) by The Pensions Schemes (Application of UK Provisions to Relevant Non-UK Schemes)(Amendment) Regulations 2006 (S.I. 2006/1960), regs. 1(2), 6
F3Words in reg. 4(3) substituted (retrospective to 6.4.2006) by The Pensions Schemes (Application of UK Provisions to Relevant Non-UK Schemes) (Amendment) Regulations 2006 (S.I. 2006/1960), regs. 1(2), 7
F4Reg. 4(3A)(3B) inserted (retrospective to 9.3.2017) by The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) (Amendment) Regulations 2018 (S.I. 2018/373), regs. 1, 2, 7(b)
F5Reg. 4(4) inserted (retrospective to 6.4.2006) by The Pensions Schemes (Application of UK Provisions to Relevant Non-UK Schemes) (Amendment) Regulations 2006 (S.I. 2006/1960), regs. 1(2), 8
F6Words in reg. 4(4) substituted (retrospective to 9.3.2017) by The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) (Amendment) Regulations 2018 (S.I. 2018/373), regs. 1, 2, 7(c)
Commencement Information