Modifications etc. (not altering text)
C1Pt. 4 modified (N.I.) (1.4.2006) by The Firemens Pension Scheme Order (Northern Ireland) 2006 (S.R. 2006/210), arts. 1(2), 103
C2Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 12
C3Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 13(5)
C4Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 9, 10
C5Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 26
(1)This section applies if—
(a)at any time after the death of a relevant member of a registered pension scheme, there is an increase in the pension rights of another member of the pension scheme which is attributable to the death, and
(b)the dead member and other member were connected persons immediately before the death.
(2)A member of a registered pension scheme is a relevant member if, immediately before his death, any of his rights under the pension scheme are—
(a)rights to benefit to which the member (or any dependant of the member) has a prospective entitlement under an arrangement under the pension scheme, or
(b)rights representing the member's unsecured pension fund, alternatively secured pension fund, dependant's unsecured pension fund or dependant's alternatively secured pension fund in respect of an arrangement under the pension scheme.
(3)There is at any time an increase in the pension rights of the other member of the pension scheme which is attributable to the death if—
(a)the consideration which might be expected to be received in respect of an assignment (or assignation) of the benefits to which he is actually or prospectively entitled under the pension scheme at that time, exceeds
(b)the consideration which might be expected to be received in respect of such an assignment (or assignation) immediately before that time,
in consequence of the death (ignoring for the purposes of paragraphs (a) and (b) any power to reduce the entitlement to the benefits).
(4)The pension scheme is to be treated as making an unauthorised payment to the other member (or to the other member's personal representatives) of an amount equal to the excess (but subject to subsection (6)).
(5)The amount which would (apart from this subsection) constitute the unauthorised payment is to be reduced by so much of the excess as arises—
(a)from the payment of any transfer lump sum death benefit in respect of the dead member so as to become held for the purposes of, or to represent accrued rights under, an arrangement relating to the other member,
(b)from the other member becoming entitled to pension death benefits or lump sum death benefits in respect of the dead member, or
(c)in any manner prescribed by regulations made by the Board of Inland Revenue.
(6)Regulations under subsection (5)(c) may include provision having effect in relation to times before they are made.
(7)This section does not apply if—
(a)at the time of the increase mentioned in subsection (1)(a) there at least 20 members of the pension scheme, and
(b)the benefits to which each of them is actually or prospectively entitled under the pension scheme are increased at the same rate in consequence of the death.
(8)This section does not apply if the increase in the pension rights of the other member is brought about by an assignment (or agreement to assign) within section 172.
[F2(8A)Nothing in this section applies in relation to the rights representing the member's unsecured pension fund if those rights would represent the member's alternatively secured pension fund but for paragraph 11(6) and (7) of Schedule 28.]
(9)Section 839 of ICTA (connected persons) applies for the purposes of this section.]
Textual Amendments
F1Ss. 172A-172D inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 38, 64(1)
F2S. 172B(8A) inserted (retrospective to 6.4.2006) by Finance Act 2007 (c. 11), Sch. 19 paras. 12(5), 29(4)