Income and Corporation Taxes Act 1988

[F1 634A Income withdrawals by member. U.K.

(1) Where a member elects to defer the purchase of an annuity such as is mentioned in section 634, income withdrawals may be made by him during the period of deferral, subject as follows.

[F2 (1A) The Board shall not refuse to approve a personal pension scheme by reason only that it makes provision for arrangements under the scheme which enable a member who makes such an election as is mentioned in subsection (1) above to apply different parts of the personal pension fund at different times in the purchase of different annuities satisfying the conditions in section 634 (whether commencing on the same day or on different days).]

(2) Income withdrawals must not be made before the member attains the age of 50, unless—

(a) they are available on his becoming incapable through infirmity of body or mind of carrying on his own occupation or any occupation of a similar nature for which he is trained or fitted, or

(b) the Board are satisfied that his occupation is one in which persons customarily retire before that age.

(3) Income withdrawals must not be made after the member attains the age of 75.

(4) The aggregate amount of income withdrawals by a member in each successive period of twelve months [F3 in each valuation period] must be not less than 35 per cent. or more than 100 per cent. of the annual amount of the annuity which would have been purchasable by him—

[F4 (a) in the case of the initial period, on the relevant reference date; and

(b) in the case of any subsequent valuation period,

[F5 (i)] on a particular day in the period of sixty days ending with the relevant reference date[F6 , or

(ii) immediately after the last qualifying annuitisation,

whichever is the later]].

[F7 (4A) For the purposes of subsection (4) above—

(a) “annuitisation” means the application of part of the personal pension fund in the purchase of an annuity satisfying the conditions in section 634; and

(b) an annuitisation is a “qualifying annuitisation", in relation to any such period of twelve months as is mentioned in subsection (4) above, if it has taken place—

(i) in an earlier such period, but

(ii) since the relevant reference date.]

[F8 (5) For the purposes of this section, in the case of any arrangements the relevant reference date—

(a) for the period beginning with the member’s pension date (“the initial period”), is that pension date; and

(b) for each succeeding period, is the first day of the period;

and, subject to subsection (5D) below, any period mentioned in paragraph (a) or (b) above (a “valuation period”) is a period of three years.]

[F9 (5A) Where—

(a) a member has made an election under subsection (1) above in respect of two or more personal pension arrangements under the same personal pension scheme, and

(b) in the case of one or more of those arrangements, the relevant reference date for any valuation period after the initial period would not, apart from this subsection, coincide with a date which is (or, but for the ending of the period of deferral, would be) the relevant reference date for a valuation period in the case of the arrangements with the earliest pension date,

the relevant reference date for any valuation period other than the initial period, and the valuation period to which that date relates, shall, if the scheme or the arrangements so require, be determined in the case of all those arrangements on the assumption that the pension date is in each case the same as in the case of the arrangements with the earliest pension date.

(5B) In determining in accordance with subsection (5A) above the relevant reference date and the valuation period to which it relates, in the case of any arrangements (“the relevant arrangements”), there shall be left out of account any arrangements in whose case the period of deferral ended—

(a) before the actual pension date in the case of the relevant arrangements; or

(b) before the date on which the relevant arrangements first become subject to such a requirement as is mentioned in subsection (5A) above.

(5C) But where, in the case of any arrangements,—

(a) the relevant reference date for any valuation period falls to be determined, in accordance with the assumption in subsection (5A) above, by reference to the pension date for any other arrangements, and

(b) the period of deferral in the case of those other arrangements comes to an end,

the same pension date shall continue to be assumed under that subsection for that and any subsequent valuation period, notwithstanding the coming to an end of the period of deferral in the case of those other arrangements (and references in subsection (5A) to the arrangements with the earliest pension date shall be construed accordingly).

(5D) Where, in the case of any personal pension arrangements, in consequence of subsection (5A) above the relevant reference date for any valuation period (“the later date”) falls less than three years after the relevant reference date for the previous valuation period (“the earlier date”)—

(a) the valuation period beginning with the earlier date shall end with the day before the later date; and

(b) [F10 subsections (4) and (4A)] above shall apply in relation to any portion of the period which remains after the completion of any successive periods of twelve months as if it were a period of twelve months.]

(6) The right to income withdrawals must not be capable of assignment or surrender [F11 , except for the purpose of giving effect to a pension sharing order or provision].]

Textual Amendments

F1 S. 634A inserted (1.5.1995) by Finance Act 1995 (c. 4), Sch. 11 para. 4

F2 S. 634A(1A) inserted (6.4.2001) by Finance Act 2000 (c. 17), Sch. 13 para. 11(2)(6) (with Sch. 13 Pt. 2)

F3 Words in s. 634A(4) substituted (1.10.2000) by Finance Act 2000 (c. 17), Sch. 13 para. 10(2)(a)(5) (with Sch. 13 Pt. 2)

F4 S. 634(4)(a)(b) substituted for words in s. 634(4) (with effect in accordance with Sch. 13 para. 10(6)(7) of the amending Act) by Finance Act 2000 (c. 17), Sch. 13 para 10(2)(b) (with Sch. 13 Pt. 2)

F5 Words in s. 634A(4)(b) renumbered as s. 634A(4)(b)(i) (6.4.2001) by virtue of Finance Act 2000 (c. 17), Sch. 13 para. 11(3)(a)(6) (with Sch. 13 Pt. 2)

F6 Words in s. 634A(4)(b) added (6.4.2001) by Finance Act 2000 (c. 17), Sch. 13 para. 11(3)(b)(6) (with Sch. 13 Pt. 2)

F7 S. 634A(4A) inserted (6.4.2001) by Finance Act 2000 (c. 17), Sch. 13 para. 11(4)(6) (with Sch 13 Pt. 2)

F8 S. 634A(5) substituted (1.10.2000) by Finance Act 2000 (c. 17), Sch. 13 para. 10(3)(5) (with Sch. 13 Pt. 2)

F9 S. 634A(5A)-(5D) inserted (with effect in accordance with Sch. 13 para. 10(6)(7) of the amending Act) by Finance Act 2000 (c. 17), Sch. 13 para. 10(4) (with Sch. 13 Pt. 2)

F10 Words in s. 634A(5D)(b) substituted (6.4.2001) by Finance Act 2000 (c. 17), Sch. 13 para. 11(5)(6) (with Sch. 13 Pt. 2)

F11 Words in s. 634A(6) inserted (with application in accordance with Sch. 10 para 18(8)(9) of the amending Act) by Finance Act 1999 (c. 16), Sch. 10 para. 12(2); S.I. 2000/1093, art. 2