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The Registered Pension Schemes (Splitting of Schemes) Regulations 2006

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Statutory Instruments

2006 No. 569

INCOME TAX

The Registered Pension Schemes (Splitting of Schemes) Regulations 2006

Made

9th March 2006

Laid before the House of Commons

10th March 2006

Coming into force

6th April 2006

The Commissioners for Her Majesty’s Revenue and Customs, in exercise of the powers conferred by section 274A of the Finance Act 2004(1), and now exercisable by them(2) make the following Regulations:

Citation, commencement and interpretation

1.  (1)  These Regulations may be cited as the Registered Pension Schemes (Splitting of Schemes) Regulations 2006 and shall come into force on 6th April 2006.

(2) In these Regulations—

“group of employers” means two or more employers who are formally or informally linked to each other by reasons of common management, shareholding, staff or close business interests;

HMRC” means the Commissioners for Her Majesty’s Revenue and Customs;

“split scheme” means a registered pension scheme that is being treated, in accordance with regulation 2, as having been split into two or more sub-schemes;

“sub-scheme” means a scheme which forms part of a split scheme and which is being treated as a separate pension scheme under and for the purposes set out in these regulations;

“split scheme administrator” means a scheme administrator of a split scheme;

“sub-scheme administrator” means the scheme administrator of a sub-scheme appointed in accordance with the rules of the split scheme to be responsible for the discharge of the functions conferred or imposed on the sub-scheme administrator by or under these Regulations;

“section” without more, means a section of the Finance Act 2004;

“schedule” without more, means a schedule to the Finance Act 2004.

Description of schemes to be split

2.  (1)  The following registered pension schemes shall be treated as split schemes for the purposes of these Regulations—

(a)the registered pension schemes listed in Schedule 1;

(b)a registered pension scheme which meets the conditions in paragraph (5);

(c)a successor scheme to any of the above schemes.

(2) A successor scheme is a registered pension scheme established to take over some or all of the rights and obligations of a split scheme.

(3) The scheme administrator of a successor scheme shall notify HMRC of any sub-schemes in respect of which he is assuming responsibility immediately following registration of the successor scheme.

  • The notification shall—

    (a)

    be in a form specified by HMRC, and;

    (b)

    contain any information reasonably required by HMRC.

(4) Schedule 2 lists the schemes which, at the coming into force of these Regulations, are to be treated as sub-schemes of the split schemes referred to in sub-paragraph (1).

(5) The conditions referred to in sub-paragraph (1)(b) are as follows.

Condition A

The pension scheme falls within Paragraph 1(1)(a) or (c) of Schedule 36 to the Finance Act 2004.

Condition B

The pension scheme provides benefits to or for the benefit of the employees of two or more employers.

Condition C

The rules of the pension scheme as at 28th February 2006 provided for the establishment of separate schemes for each of the participating employers or group of employers and for the administration of such schemes to be carried out by separate scheme administrators.

(6) A successor sub-scheme is a scheme established to take over some or all of the rights and obligations of a sub-scheme.

(7) The scheme administrator of a successor sub-scheme shall notify HMRC immediately following his assumption of liability of the successor sub-scheme.

  • The notification shall—

    (a)

    be in a form specified by HMRC, and

    (b)

    contain any information reasonably required, including the name and address of the scheme administrator.

Responsibilities and liabilities of sub-scheme administrators

3.  (1)  The sub-scheme administrator of a sub-scheme shall assume the liabilities and responsibilities set out in Schedule 3 to these Regulations in relation to that scheme.

(2) In the provisions referred to in that Schedule any reference to the scheme administrator shall be read as a reference to the sub-scheme administrator.

(3) The split scheme administrator shall cease to have responsibility or liability in relation to the matters referred to in paragraph (1) in respect of the sub-scheme.

(4) The provisions of section 270(2) and (3) (meaning of “scheme administrator”) apply to the sub-scheme administrator and the references to the scheme administrator in those subsections shall be read as references to the sub-scheme administrator).

(5) Section 272 (trustees etc. liable as scheme administrator) applies to sub-scheme administrators with the following modifications—

(a)in subsection (1)“ for “registered pension scheme”; substitute “sub-scheme”;

(b)in subsections (1)(a) to (c), (2)(a) and (b) for “scheme administrator” (in each place) substitute “sub-scheme administrator”;

(c)in subsections (1)(a) to (c) and (2), (3) and (5) for “pension scheme” (in each place) substitute “sub-scheme”;

(d)in subsection (2)—

(i)in paragraph (a) after “by virtue of this Part” insert “as applied by regulation 3 of the Registered Pensions (Splitting of Schemes) Regulations 2006”; and

(ii)in paragraph (b) after “by or under this Part.” insert “as applied by the Registered Pensions (Splitting of Schemes) Regulations 2006”; and

(e)in subsection (4) for “pension scheme” substitute “sub-scheme”.

(6) Section 273 (members liable as scheme administrator) applies to members of a sub-scheme with the following modifications—

(a)in subsection (1) for “registered pension scheme” substitute “sub-scheme”;

(b)in subsections (1)(a) and (b) for “pension scheme” substitute “sub-scheme”;

(c)in subsection (1)(a) after “(trustees, etc.)” add “(as modified by regulation 3 of the Registered Pensions (Splitting of Schemes) Regulations 2006)”;

(d)in subsection (1)(b) omit the words “or section 242 (de-registration charge)”;

(e)in subsections (2) and (4) for “pension scheme” substitute “sub-scheme”;

(f)in subsection (5)(a) for “the pension scheme” substitute “the split scheme”;

(g)in subsections (5)(b) and (d) for “the pension scheme” substitute “the sub-scheme”;

(h)in subsection (5)(c) after the words “that the pension scheme was” add “part of”;

(i)in subsection (10) for “the pension scheme” substitute “the sub-scheme”.

(7) Section 274(2) (supplementary) applies to sub-scheme administrators with the following modifications—

(a)for “scheme administrator” substitute “sub-scheme administrator”; and

(b)for “registered pension scheme” substitute “sub-scheme”.

4.  (1)  Section 209(5) (unauthorised payments surcharge) shall be modified as follows.

(a)in paragraph (b) delete “and”;

(b)in paragraph (c) after “the scheme administrator” add “and”;

(c)after paragraph (c) add—

(d)the sub-scheme administrator,.

5.  (1)  Paragraph 11 of Schedule 31 (insertion of chapter 15A into ITEPA 2003) shall be modified as follows.

(2) After subsection (4) of the inserted section 636A insert—

(4A) In the case of a registered pension scheme which is a split scheme for the purposes of the Registered Pensions Schemes (Splitting of Schemes) Regulations 2006, subsections (3) and (4) shall have effect as if the references to the scheme administrator were to the sub-scheme administrator (within the meaning of those Regulations)..

(3) Paragraph 1 of Schedule 35 (consequential amendments to the Taxes Management Act 1970) shall be modified as follows.

(a)in the substitution to section 9(1A) of the Taxes Management Act 1970, in sub-paragraph (a) delete “or”; and

(b)after sub-paragraph (a) add—

(ab)is chargeable on the sub-scheme administrator of a sub-scheme under Part 4 of the Finance Act 2004 as modified by the Registered Pensions (Splitting of Schemes) Regulations 2006, or

(4) Paragraph 16 of Schedule 35 (consequential amendments to section 349B(3) of ICTA) shall be modified as follows.

(5) After the substituted sub-paragraph (i) add—

(ia)the sub-scheme administrator of a sub-scheme which forms part of a split scheme pursuant to the Registered Pensions (Splitting of Schemes) Regulations 2006;

(6) Paragraph 33 of Schedule 35 (consequential amendments to section 824(9) of ICTA) shall be modified as follows.

(7) After the insertion of the words “scheme administrators of registered pension schemes” add—

  • sub-scheme administrators of sub-schemes which form part of a split scheme pursuant to the Registered Pensions (Splitting of Schemes) Regulations 2006.

David Varney

Paul Gray

Two of the Commissioners for Her Majesty’s Revenue and Customs

9th March 2006

Regulation 2(1)(a)

SCHEDULE 1Schemes to be treated as split schemes pursuant to regulation 2(1)(a)

Name of SchemeEnabling legislationGoverning regulations
Police Pension Schemes 1-8 Police Pensions Act 1982The Police Pensions Regulations 1987 (SI 1987 No.257) as amended
Firefighters Pension Schemes.26 Fire Services Act 1947 and s.34 Fire and Rescue Services Act 2004The Firemen’s Pension Scheme Order 1992 SI 1992 No.129 as amended
Local Government Pension Schemes.7 and s.12 Superannuation Act 1972The Local Government Pension Scheme Regulations 1997 SI 1997 No.1612 as amended
Local Government Pension Scheme (Scotland)s.7 and s.12 Superannuation Act 1972The Local Government Pension Scheme (Scotland) Regulations 1998 SI 1998 No.366 (S.14) as amended
Electricity Supply Pension Scheme

Regulation 2(4)

SCHEDULE 2Schemes to be treated as sub-schemes pursuant to regulation 2(4)

Name of sub-schemeSplit scheme to which it relates

Metropolitan Police Authority

Norfolk Police Authority

North Yorkshire Police Authority

North Wales Police Authority

Northamptonshire Police Authority

Northumbria Police Authority

Nottinghamshire Police Authority

South Wales Police Authority

South Yorkshire Police Authority

Staffordshire Police Authority

Suffolk Police Authority

Surrey Police Authority

Sussex Police

Thames Valley Police Authority

Warwickshire Police Authority

West Mercia Police Authority

West Midlands Police Authority

West Yorkshire Police Authority

Wiltshire Police Authority

Central Scotland Joint Police Board

Dumfries & Galloway Police Authority

Fife Police Authority

Grampian Joint Police Board

Lothian and Borders Police Board

Northern Joint Police Board

Strathclyde Joint Police Fire Board

Tayside Joint Police Board

Police Pension Scheme

Avon Fire Authority

Bedfordshire and Luton Combined Fire Authority

Buckinghamshire and Milton Keynes Fire Authority

Cambridgeshire and Peterborough Fire Authority

Cheshire Fire Authority

Cleveland Fire Authority

Cornwall Fire Authority

County Durham and Darlington Fire and Rescue Authority

Cumbria Fire Authority

Derbyshire Fire Authority

Devon Fire Authority

Dorset Fire Authority

East Sussex Fire Authority

Essex Fire Authority

Gloucestershire Fire Authority

Greater Manchester Fire and Civil Defence Authority

Hampshire Fire and Rescue Authority

Hereford and Worcester Combined Fire Authority

Hertfordshire Fire Authority

Humberside Fire Authority

Isle of Wight Fire Authority

Kent and Medway Towns Fire Authority

Lancashire Combined Fire Authority

Leicester, Leicestershire and Rutland Combined Fire Authority

Lincolnshire Fire Authority

London Fire and Emergency Planning Authority

Merseyside Fire and Civil Defence Authority

Mid and West Wales Fire Authority

Norfolk Fire Authority

North Wales Fire Authority

North Yorkshire Fire and Rescue Authority

Northamptonshire Fire Authority

Northumberland Fire Authority

Nottinghamshire and City of Nottingham Fire Authority

Oxfordshire Fire Authority

Royal Berkshire Fire Authority

Shropshire and Wrekin Fire Authority

Somerset Fire Authority

South Wales Fire Authority

South Yorkshire Fire and Civil Defence Authority

Stoke on Trent and Staffordshire Fire Authority

Suffolk Fire Authority

Surrey Fire Authority

Tyne & Wear Fire and Civil Defence Authority

Warwickshire Fire Authority

West Midlands Fire and Civil Defence Authority

West Sussex Fire Authority

West Yorkshire Fire and Civil Defence Authority

Wiltshire and Swindon Fire Authority

Dumfries & Galloway Fire and Rescue Authority

Highland and Islands Fire Board

Grampian Fire Board

Lothian and Borders Fire Board

Central Scotland Fire Board

Fife Fire and Rescue Authority

Strathclyde Fire Board

Tayside Fire Board

Firefighters Pension Scheme

Bath & North East Somerset Council

Bedfordshire County Council

Buckinghamshire County Council

Cambridgeshire County Council

Carmarthenshire County Council

Cheshire County Council

City and County of Cardiff Council

City and County of Swansea

City of London

City of Bradford Metropolitan District Council

Cornwall County Council

Cumbria County Council

Derbyshire County Council

Devon County Council

Dorset County Council

Durham County Council

East Riding of Yorkshire Council

East Sussex County Council

Environment Agency

Essex County Council

Flintshire County Council

Gloucestershire County Council

Gwynedd Council

Hampshire County Council

Hertfordshire County Council

Isle of Wight Council

Kent County Council

Lancashire County Council

Leicestershire County Council

Lincolnshire County Council

London Borough of Barking and Dagenham

London Borough of Barnet

London Borough of Bexley

London Borough of Brent

London Borough of Bromley

London Borough of Camden

London Borough of Croydon

London Borough of Ealing

London Borough of Enfield

London Borough of Greenwich

London Borough of Hackney

London Borough of Hammersmith and Fulham

London Borough of Haringey

London Borough of Harrow

London Borough of Havering

London Borough of Hillingdon

London Borough of Hounslow

London Borough of Islington

London Borough of Lambeth

London Borough of Lewisham

London Borough of Merton

London Borough of Newham

London Borough of Redbridge

London Borough of Richmond Upon Thames

London Borough of Southwark

London Borough of Sutton

London Borough of Tower Hamlets

London Borough of Waltham Forest

London Borough of Wandsworth

London Pensions Fund Authority

Middlesbrough Borough Council

Norfolk County Council

North Yorkshire County Council

Northamptonshire County Council

Northumberland County Council

Nottinghamshire County Council

Oxfordshire County Council

Powys County Council

Rhondda-Cynon-Taff County Borough Council

Royal Borough of Kensington & Chelsea

Royal Borough of Kingston Upon Thames

Royal Borough of Windsor and Maidenhead

Shropshire County Council

Somerset County Council

South Tyneside Metropolitan Borough Council

South Yorkshire Pensions Authority

Staffordshire County Council

Suffolk County Council

Surrey County Council

Tameside Metropolitan Borough Council

Torfaen County Borough Council

Warwickshire County Council

Westminster City Council

West Sussex County Council

Wiltshire County Council

Wirral District Council

Wolverhampton City Council

Worcestershire County Council

Local Government Pension Scheme

Aberdeen City Council

The City of Edinburgh Council

The City of Glasgow Council

Dumfries & Galloway Council

Dundee City Council

Falkirk Council

Fife Council

The Highland Council

Orkney Islands Council

Scottish Borders Council

Shetland Islands Council

Local Government Pension Scheme (Scotland)

Alfred McAlpine Group

Areva Group

British Energy Combined Group

British Energy Generation Group

Drax Power Group

EA Technology Group

EDF Energy Group

Electricity Association Services Group

E.ON UK Group

First Hydro Group

International Power Group

Keadby Generation Group

Magnox Electric Group

Manweb Group

National Grid Electricity Group

Northern Electric Group

RWE npower Group

Southern Electric Group

United Utilities Group

Western Power Distribution Group

Electricity Supply Pension Scheme

Regulation 3

SCHEDULE 3Responsibilities and liabilities of sub-scheme administrators in respect of a sub-scheme

PART 1Finance Act 2004

Statutory ReferenceSubject-matter
Liabilities
Section 205Short service refund lump sum charge
Section 206Special lump sum death benefit s charge
Section 207Authorised surplus payments charge
Section 215(9)Lifetime allowance charge – amount of charge
Section 217Lifetime allowance charge (joint & several with the individual)
Section 227(3)Annual allowance charge
Section 238(3) and (4)Pension input period
Section239Scheme sanction charge
Information
Section 250(1)To make and deliver a registered pension scheme return
Section 254Accounting for tax by scheme administrators
Interest and penalties
Section 257Penalty for failure to comply with a S250 notice.
Section 258(1)Penalty for failure to provide information within S251(1)(a)
Section 258(2)Penalty for failure to comply with regulations within S251(1)(b)
Section 259(1)Penalty for failure to comply with a notice under S252
Section260(1), (4) and (6)Penalties for failure to make a return within S254
Section 265(3)Penalty for winding up a scheme to obtain a winding up lump sum
Section 266(2)Penalty for transfers to “non” insured schemes (unauthorised transfer)
Section 266BScheme liability (inserted by Paragraph 4 Schedule10 FA 05)
Section 267Discharge of lifetime allowance charge in the case of good faith.
Section 268Unauthorised payment surcharge & scheme sanction charge
Scheme administrator
Section 271Liability of a scheme administrator
Section 272Trustees etc. liable as scheme administrator
Section 273Members liable as scheme administrator
Section 274Supplementary provisions
Paragraph 1of Schedule28Scheme administrator to receive evidence of member’s ill health.
Paragraph 15(2)(b) of Schedule28Scheme administrator to agree if a child is a dependant
Paragraph 15(3) of Schedule 28Scheme administrator to decide whether someone is a dependant.
Paragraph 4(1) of Schedule 29Scheme administrator to consider evidence of serious ill health
Paragraph 19(1)(d) of Schedule 29Scheme administrator to nominate arrangement for transfer lump sum benefit.
Paragraph 19(2) (e) of Schedule 29Scheme administrator to nominate arrangement for transfer lump sum benefit.
Paragraph 9(2) of Schedule 32Changes to benefit crystallisation event 2
Paragraph 9(3) of Schedule 32Changes to benefit crystallisation event 2 (inserted by paragraph 43(4) of Schedule10 to the Finance Act 2005 05).
Paragraph 13(4) and (5) of Schedule 32Changes to benefit crystallisation event 3 (inserted by paragraph 43(5) of Schedule10 to the Finance Act 20005)
Paragraph 14(1A) & (1B) of Schedule 32Changes to benefit crystallisation event 5 (inserted by paragraph 43(7) of Schedule10 to the Finance Act 2005)
Paragraph 5 of Schedule 34Exemption for scheme administrator from s.205 & s.206 charges
Paragraph 17 of Schedule 34Omits reference to scheme administrator in s. 217
Paragraph 4(1), (2) and (3) of Schedule36Transitional provisions for deemed registered schemes
Paragraph 6 of Schedule 36Pre-commencement liability of scheme administrator

PART 2Secondary Legislation

  • The Pension Schemes (Discharge of Liabilities under Section 267 and 268 of the Finance Act 2004) Regulations 2005(3)

  • The Registered Pension Schemes (Relief at Source) Regulations 2005(4)

  • The Registered Pension Schemes (Minimum Contributions) Regulations 2006(5)

  • The Registered Pension Schemes (Accounting and Assessment) Regulations 2005(6)

  • The Registered Pension Schemes and Employer Financed Retirement Benefit Schemes (Information) (Prescribed Description of Person) Regulations 2005(7)

  • The Registered Pension Schemes (Provision of Information) Regulations 2006(8)

  • The Registered Pension Schemes (Modification of the Rules of Existing Schemes) Regulations 2006(9)

  • The Pension Benefits (Insurance Company Liable as Scheme Administrator) Regulations 2006(10)

  • The Registered Pension Schemes (Meaning of Pension Commencement Lump Sum) Regulations 2006(11)

  • The Registered Pension Schemes and Overseas Pension Schemes (Electronic Communication of Returns and Information) Regulations 2006(12)

  • The Taxes Management Act 1970 (Modification of Schedule 3 for Pension Schemes Appeals) Order 2005(13)

  • The Registered Pension Schemes (Transfer of Sums and Assets) Regulations 2006(14)

  • The Registered Pension Schemes (Unauthorised Payments by Existing Schemes) Regulations 2006(15)

Explanatory Note

(This note is not part of the Regulations)

These Regulations provide for certain registered pension schemes to be treated as if they were a number of separate registered pension schemes pursuant to section 274A of the Finance Act 2004 (c. 12) (“the 2004 Act”).

Regulation 1 provides for citation, commencement and interpretation.

Regulation 2 prescribes the pension schemes that shall be treated as separate pension schemes. Paragraph (1) provides that the schemes listed in Schedule 1 together with any successor schemes shall be treated as schemes that have been split into a number of separate schemes (“split schemes”). Paragraph (2) contains a definition of “successor schemes”. Paragraph (3) provides that the scheme administrator of a successor scheme shall notify HMRC of any successor schemes that he is assuming responsibility for. Paragraph (4) provides that Schedule 2 shall list schemes which are being treated as separate schemes for the purpose of the regulations (“sub-schemes”). Paragraph (5) and (6) provide that, in addition to the schemes listed in Schedule 1, schemes which meet the conditions set out shall be treated as split schemes. Paragraph (7) defines a sub successor scheme and Paragraph (8) provides that the scheme administrator of a sub successor scheme shall notify HMRC when he assumes responsibility for such a scheme.

Regulation 3 provides that scheme administrators of sub-schemes shall assume the liabilities and responsibilities set out in schedule 3 and that the scheme administrator of the split scheme shall cease to have responsibility for those matters. Paragraphs (3) to (6) provide that sections 270,272, 273 and 274 of the 2004 Act shall apply to sub-scheme administrators with the amendments set out.

Regulation 4 contains amendments to section 209 (unauthorised payments surcharge) of the 2004 Act so that the charge can apply to sub-scheme administrators.

These Regulations impose no new costs on business.

(1)

2004 c. 12. Section 274A was inserted by paragraph 50 of Schedule 10 to the Finance Act 2005 (c. 7).

(2)

The functions of the Commissioners of Inland Revenue were transferred to the Commissioners for Her Majesty’s Revenue and Customs by section 5(2) of the Commissioners for Revenue and Customs Act 2005 (c. 11). Section 50(1) of that Act provides that a reference to the Commissioners of Inland Revenue (however expressed) shall be taken as a reference to the Commissioners for Her Majesty’s Revenue and Customs.

(3)

S.I. 2005/3452.

(4)

S.I. 2005/3488.

(5)

S.I. 2005/3450.

(6)

S.I. 2005/3454.

(7)

S.I. 2005/3455.

(8)

S.I. 2006/567.

(9)

S.I. 2006/364.

(10)

S.I. 2006/136.

(11)

S.I. 2006/135.

(12)

S.I. 2006/570.

(13)

S.I. 2005/3457.

(14)

S.I. 2006/499.

(15)

S.I. 2006/365.

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