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Pension Schemes Act 2015

Section 54: Independent advice: income tax exemption

205.This section inserts a new section, 308B, into the Income Tax (Earnings and Pensions) Act 2003 (ITEPA). That section provides that no liability to income tax will arise where conditions A to C are satisfied. Condition A is that the payment or reimbursement is required by regulations made under the powers given by sections 49 and 52, which may require that employers must provide appropriate independent advice. If only part of the payment meets this requirement - for example where the amount exceeds any defined cost threshold provided for in the regulations - only that part will benefit from the tax exemption. Condition B is that the income tax exemption is not valid for any appropriate independent advice provided as part of a salary sacrifice arrangement, as defined in section 308B(6). Condition C is that such other requirements as may be specified in regulations made by the Treasury must be satisfied.

206.Section 54(2) makes a consequential amendment to section 228 ITEPA.

207.Section 54(3) provides that the amendments will take effect for the tax year 2015-16 and subsequent tax years.

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