EXPLANATORY NOTE
(This note is not part of the Order)
This Order amends Schedule 35 to the Finance Act 2009 (“FA 2009”) and the Special Annual Allowance Charge (Application to Members of Currently-Relieved Non-UK Pension Schemes) Order 2009 (S.I 2009/2031).
Article 1 provides for citation, commencement and effect. The Order has retrospective effect from 22 April 2009, pursuant to paragraph 19(3) of Schedule 35 to FA 2009.
Article 2 introduces the amendments to Schedule 35 to FA 2009 which deals with the special annual allowance charge.
Article 3 amends paragraph 7 of Schedule 35. “Protected lump sum input amounts” as defined in paragraph 13A (which is inserted by article 8 of this Order) are added to the list of items that are to be disregarded when calculating the “total adjusted pension input amount”.
Article 4 amends paragraph 8 which deals with defined benefit arrangements. Two new categories of contributions are added to the contributions that are protected pension input amounts under this paragraph. The first category is certain benefits accruing under an arrangement which was entered into on or after 22 April 2009 in accordance with a written agreement made on or before 22 April 2009. The second category is certain benefits accruing under a new arrangement which commenced on or after 22 April 2009 where there was a transfer to the new arrangement due to a relevant business transfer or re-organisation of pension arrangements. Article 5 makes the same amendments to paragraphs 9 which deals with cash balance arrangements.
Article 6 amends paragraph 10 which deals with money purchase arrangements under occupational and public service pension schemes. Protection is extended to certain benefits payable under an arrangement that was entered into in accordance with a written agreement made on or before 22 April 2009. The paragraph is further amended to extend protection to certain contributions payable under a new arrangement where there was a transfer to the new arrangement due to a relevant business transfer or re-organisation of pension arrangements. Article 7 makes the same amendments to paragraph 11 which deals with other money purchase arrangements under other pension schemes.
Article 8 inserts paragraph 13A. Paragraph 13A provides for a new category of protected pension input amounts – contributions paid in accordance with agreements entered into on or before 22 April 2009. Article 9 contains a consequential amendment to paragraph 14 extending the anti-avoidance provision contained in that paragraph to the new paragraph 13A.
Article 10 amends paragraph 16 (pre-22 April 2009 pension input amount). The date “21 April 2009” in sub-paragraph (3) is amended to “22 April 2009”. Article 11 contains a corresponding amendment to the Special Annual Allowance Charge (Application to Members of Currently-Relieved Non-UK Pension Schemes) Order 2009 (S.I. 2009/2031).
A full and final Impact Assessment has not been produced for this instrument as a negligible impact on the voluntary or private sectors is foreseen.