The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) (No. 2) Regulations 2023

Chapter 1 legacy schemes: inward transfer, extinguishment and creation of PPA rights

7.—(1) Paragraphs (2) and (3) apply where—

(a) there is a transfer of sums or assets held for the purposes of, or representing accrued rights under, an arrangement under a partnership pension account (“the transfer”),

(b) as a result of the transfer, the sums or assets become held for the purposes of, or represent rights under, an arrangement under the relevant Chapter 1 legacy scheme,

(c) the transfer is made in accordance with conditions specified in provision made under section 5 of PSPJOA 2022 (election for retrospective provision to apply to opted-out service),

(d) rights are conferred in the arrangement under the relevant Chapter 1 legacy scheme which represent the benefits that a member would have accrued under that scheme, and

(e) in connection with that conferral of rights, all rights relating to the transferred sums or assets are then extinguished in that arrangement.

(2) For the purposes of determining the pension input amount of an individual in respect of an arrangement under the relevant Chapter 1 legacy scheme—

(a) for any pension input period in which the individual had relevant opted-out service, the pension input amount is to be reduced by the amount of any pension input amount for an arrangement under the partnership pension account which relates to a pension input period ending in the same tax year,

(b) where all the steps in paragraph (1)(a) to (e) occur during the transfer pension input period, section 236(5A) of FA 2004 (relevant inward transfers)(1) is to be ignored for that pension input period, and

(c) where the conferral of rights mentioned in paragraph (1)(d) occurs during the transfer pension input period, but the extinguishment of rights mentioned in paragraph (1)(e) occurs during a subsequent pension input period, the extinguishment is be ignored for that subsequent pension input period.

(3) For the purposes of paragraph (2)(a), if the individual has become entitled under an arrangement under the partnership pension account to the present payment of benefits prior to the transfer, the pension input amount for that arrangement is to be determined by—

(a) calculating the pension input amount of the arrangement under section 233 of FA 2004 (pension input amount: other money purchase arrangements)(2),

(b) establishing the percentage of the individual’s rights under the arrangement that do not relate to that entitlement, and

(c) multiplying the amount mentioned in sub-paragraph (a) by that percentage.

(4) In this regulation—

“relevant opted-out service” has the same meaning as in Part 1 of Chapter 1 of PSPJOA 2022(3), and

“transfer pension input period” means the pension input period in which the transfer mentioned in paragraph (1)(a) occurs.

(1)

Subsection (5A) of section 236 of FA 2004 was inserted by S.I. 2015/80.

(2)

Section 233 of FA 2004 was amended by section 52 of FA 2013 and by S.I. 2015/80.

(3)

By virtue of regulation 2(2)(a), section 5(7) of PSPJOA 2022 specifies when a person’s opted-out service will be “relevant” in relation to a Chapter 1 legacy scheme. Section 36 of PSPJOA 2022 determines whether any continuous period of service of a person in an employment or office will be “opted-out service” in that employment or office.