5.—(1) The Tax Credits (Definition and Calculation of Income) Regulations 2002(1) are amended as follows.
(2) In regulation 5 (pension income)—
(a)in paragraph (1)(o), for “636B or 636C” substitute “637G or 637N”;
(b)in paragraph (2), in Table 2, in entry 10, in the first column, for “section 636A of ITEPA” substitute “any provision of Chapter 15A of Part 9 of ITEPA (lump sums under registered pension schemes) apart from sections 637G and 637N”.
6.—(1) The Income Tax (Pay As You Earn) Regulations 2003(2) are amended as follows.
(2) In regulation 58 (procedure if no Form P45 and code not known: UK pensioners), in paragraph (7)—
(a)in the opening words, at the end insert “a payment which”;
(b)for sub-paragraph (a) substitute—
“(a)is treated as taxable pension income under—
(i)section 637G of ITEPA (trivial commutation lump sums and winding-up lump sums), or
(ii)section 637N of that Act (trivial commutation lump sum death benefits), and”.
(c)in sub-paragraph (b) omit “which”.
7.—(1) The Registered Pension Schemes (Accounting and Assessment) Regulations 2005(3) are amended as follows.
(2) In regulation 3 (the particulars required to be included in returns under section 254), in paragraph (1), in Table 1—
(a)omit the entry relating to the charge under section 214 of FA 2004 (lifetime allowance charge);
(b)in the entry relating to the charge under section 244A (overseas transfer charge), in the first column, for “section 244A (overseas transfer charge)” substitute “section 244AC (overseas transfer charge: transfers where no exclusion applies) or section 244IA (overseas transfer charge: transfers exceeding available allowance)”.
(3) In regulation 4 (the making of assessments), in paragraph (1), in Table 2 omit the entry for case 3 (lifetime allowance charge on receipt of a lump sum death benefit).
(4) In regulation 5 (interest on tax due under section 254 or assessed under regulation 4), in paragraph (3), in Table 3 omit the entry for tax assessed under case 3.
(5) In regulation 8 (modifications and application of TMA)—
(a)in paragraph (1) omit “3, ”;
(b)in paragraph (3), in the inserted text omit paragraph (c).
8.—(1) The Pension Schemes (Information Requirements - Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pension Schemes and Corresponding Relief) Regulations 2006(4) are amended as follows.
(2) In regulation 1 (interpretation)—
(a)at the appropriate places insert—
““available”: a reference to the amount of a member’s overseas transfer allowance that is available at any time is to the amount of that allowance that would be available if a transfer of the kind mentioned in section 244IA(1)(a) were made at that time;”
““block transfer” has the meaning given by section 244AB(2)(a);”
““relevant benefit crystallisation event” has the same meaning as in section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance);”
““relieved relevant non-UK scheme transfer” has the meaning given by section 244AB(1);”
““used up”, in relation to a transfer of the kind mentioned in section 244IA(1)(a), means the reduction caused by the transfer in the amount of the member’s overseas transfer allowance that would be available on the making of a subsequent transfer of that kind;”;
(b)in the definition of “onward transfer” for “244A” substitute “244AB”.
(3) In regulation 2 (information relating to relevant migrant members and individuals entitled to corresponding relief)—
(a)in the opening words, for “benefit crystallisation” (the first time it occurs) substitute “relevant”;
(b)in paragraphs (1)(a) and (b) and (2), before “benefit crystallisation event” insert “relevant”.
(4) In regulation 3 (information - QROPS and former QROPS)(5)—
(a)in paragraph (2)(da)(i) at the end insert “and, if so, whether under section 244AC or section 244IA”;
(b)in paragraph (2)(da)(iii) omit the “and” at the end;
(c)in paragraph (2)(da), after paragraph (iii) insert—
“(iiia)whether the payment is a transfer of the kind mentioned in section 244IA(1)(a) and, if so, the amount of the member’s overseas transfer allowance used up by the transfer, and”;
(d)in paragraph (2B)(6), for “section 244A(4)” substitute “the definition of “the relevant period” in section 244AB(1)”.
(5) In regulation 3AA (information provided to member of QROPS etc on first flexibly accessing pension rights)(7)—
(a)in paragraph (3)(b), for “£4,000” (in both places) substitute “£10,000”;
(b)in paragraph (3)(c), for the words from “under section 636A(1A) and (1B)” to the end substitute “by virtue of section 637D of ITEPA 2003 (uncrystallised funds pension lump sums), as applied by paragraph 1(1) of Schedule 34 (non-UK schemes: application of certain charges).”;
(c)in paragraph (6), for the words from “is to be read” to the end substitute “has the meaning given by section 278A.”
(6) In regulation 3AD (information provided by QROPS etc about transfers), in paragraph (2)—
(a)in sub-paragraph (d), after “transfer” insert “and, if so, whether under section 244AC or section 244IA”;
(b)omit the “and” at the end of sub-paragraph (f);
(c)after sub-paragraph (f) insert—
“(fa)whether the transfer is a transfer of the kind mentioned in section 244IA(1)(a) and, if so, the amount of the member’s overseas transfer allowance used up by the transfer, and”;
(d)in sub-paragraph (g), for “section 244A(4)” substitute “the definition of “the relevant period” in section 244AB(1)”.
(7) In regulation 3AE (information provided by member of QROPS about onward transfers)(8)—
(a)in paragraph (2)(b), for “section 244A(4)” substitute “the definition of “the relevant period” in section 244AB(1)”;
(b)in paragraph (3), for “section 244A(5)” substitute “section 244AB(1)”;
(c)in paragraph (4)(g) omit the “and” at the end;
(d)in paragraph (4), after sub-paragraph (g) insert—
“(ga)the amount of the member’s overseas transfer allowance that is available at the time the information specified in this paragraph is provided, and”.
(8) In regulation 3AG (information about liability to overseas transfer charge)(9)—
(a)in paragraph (1), after sub-paragraph (b) insert—
“(ba)whether the charge arises under section 244AC or section 244IA,
(bb)whether the transfer is a transfer of the kind mentioned in section 244IA(1)(a) and, if so, the amount of the member’s overseas transfer allowance used up by the transfer,”;
(b)in paragraph (4), for “section 244A(4)” substitute “the definition of “the relevant period” in section 244AB(1)”;
(c)after paragraph (4) insert—
“(5) Paragraph (6) applies if—
(a)a relieved relevant non-UK scheme transfer is made to a QROPS, and
(b)an event occurs before the end of the relevant period for the transfer (see the definition of “the relevant period” in section 244AB(1)) that means that the transfer no longer counts as excluded from the overseas transfer charge or that entitlement to repayment under section 244M arises.
(6) The scheme manager of the QROPS or former QROPS must, within 90 days after the date the scheme manager is notified of the event, provide the member with a notice stating the amount of the overseas transfer charge on the transfer.”.
9.—(1) The Registered Pension Schemes (Provision of Information) Regulations 2006(10) are amended as follows.
(2) Regulation 3 (provision of information by scheme administrator to HMRC) is amended in accordance with paragraphs (3) and (4).
(3) In the Table, for event 24(11) substitute—
| “24 Reportable payments of lump sums or lump sum death benefits” |
| “The scheme makes— (a)a reportable payment of a lump sum to a member (see paragraphs (10) to (14) of this regulation), or (b)a reportable payment of a lump sum death benefit in respect of a member (see paragraphs (15) and (16) of this regulation). | The information is— (a)the member’s name and national insurance number, (b)the nature and amount of the lump sum or lump sum death benefit, (c)the date of the payment, (d)in a case in which the payment is the payment of a lump sum, confirmation that any amount of tax due on the excess as a result of the charge to tax on pension income under Part 9 of ITEPA 2003 has been paid, and (e)each relevant reference number (if any).. |
(4) After paragraph (9) insert—
“(10) For the purposes of event 24, a lump sum paid to a member is “reportable” if any of the following four conditions is met.
(11) The first condition is that—
(a)the member becoming entitled to the lump sum constitutes a relevant benefit crystallisation event within the meaning of section 637Q of ITEPA 2003, and
(b)the amount of the payment exceeds the amount of the member’s lump sum allowance that is available on the member becoming so entitled.
(12) The second condition is that—
(a)the member becoming entitled to the lump sum constitutes a relevant benefit crystallisation event within the meaning of section 637S of ITEPA 2003, and
(b)the amount of the payment exceeds the amount of the member’s lump sum and death benefit allowance that is available on the member becoming so entitled.
(13) The third condition is that—
(a)the member becoming entitled to the lump sum constitutes a relevant benefit crystallisation event within the meaning of section 637Q of ITEPA 2003,
(b)the member’s lump sum allowance is, by virtue of any enactment, higher than the standard lump sum allowance, and
(c)the amount of the payment exceeds the amount of the member’s lump sum allowance that would have been available on the member becoming so entitled had that allowance been the standard lump sum allowance.
(14) The fourth condition is that—
(a)the member becoming entitled to the lump sum constitutes a relevant benefit crystallisation event within the meaning of section 637S of ITEPA 2003,
(b)the member’s lump sum and death benefit allowance is, by virtue of any enactment, higher than the standard lump sum and death benefit allowance, and
(c)the amount of the payment exceeds the amount of the member’s lump sum and death benefit allowance that would have been available on the member becoming so entitled had that allowance been the standard lump sum and death benefit allowance.
(15) For the purposes of event 24, a lump sum death benefit paid in respect of a member is “reportable” if the following condition is met.
(16) The condition is that—
(a)the payment constitutes a relevant benefit crystallisation event within the meaning of section 637S of ITEPA 2003, and
(b)the amount of the payment, either alone or when aggregated with other payments of lump sum death benefits from the same scheme that constitute relevant benefit crystallisation events within the meaning of section 637S of ITEPA 2003, exceeds the amount of the standard lump sum and death benefit allowance.
(17) In this regulation—
“the standard lump sum allowance” means the amount specified in section 637P of ITEPA, disregarding the effect of any enactment under which the amount specified in that section is treated as a different amount in relation to any individual;
“the standard lump sum and death benefit allowance” means the amount specified in section 637R of ITEPA, disregarding the effect of any enactment under which the amount specified in that section is treated as a different amount in relation to any individual.” (12).
(5) In regulation 8 (death: provision of information by scheme administrator to personal representatives)—
(a)in paragraph (2), for “defined benefits lump sum death benefit or an uncrystallised funds lump sum death benefit” substitute “relevant lump sum death benefit”;
(b)in paragraph (3)—
(i)in the words after sub-paragraph (b), for “defined benefits lump sum death benefit or an uncrystallised funds lump sum death benefit” substitute “relevant lump sum death benefit”;
(ii)at the end insert “The information is to be provided no later than the last day of the period of 2 months beginning with the day on which a request for it is received from the member’s personal representatives.”.
(6) In regulation 14 (information provided to members by scheme administrators about benefit crystallisation events), in paragraph (2) omit sub-paragraph (ba).
(7) In regulation 14ZA (information provided to member by scheme administrator where it appears member may be first flexibly accessing pension rights), in paragraph (3)(b), for “£4,000” (in both places) substitute “£10,000”.
(8) In regulation 16 (pensions and annuities in payment: information provided to and by insurance companies)—
(a)in paragraphs (2) and (3), for “benefit crystallisation events” substitute “relevant benefit crystallisation events”;
(b)in paragraph (4) omit sub-paragraph (b).
(9) In regulation 17 (payments to insurance companies from drawdown pension funds)—
(a)in paragraph (5)(b), in the words before paragraph (i), for “benefit crystallisation events” substitute “relevant benefit crystallisation events”;
(b)omit paragraph (8).
(10) Omit the italic heading after regulation 18 (retention of records).
10.—(1) The Registered Pension Schemes (Splitting of Schemes) Regulations 2006(13) are amended as follows.
(2) In regulation 5—
(a)for paragraph (1) substitute—
“(1) A reference in Chapter 15A of ITEPA (lump sums under registered pension schemes) to the scheme administrator of a registered pension scheme is to be read, if the scheme is a split scheme, as a reference to the sub-scheme administrator of the sub-scheme in question.”;
(b)omit paragraph (2).
(3) In the Table in Schedule 3 (responsibilities and liabilities of sub-scheme administrators in respect of sub-schemes)(14) omit the entries for the following statutory references—
section 215(9);
section 217;
section 267;
paragraph 9(2) of Schedule 32;
paragraph 9(3) of Schedule 32;
paragraph 13(4) and (5) of Schedule 32;
paragraph 14(1A) and (1B) of Schedule 32.
11.—(1) The Taxation of Pension Schemes (Transitional Provisions) Order 2006(15) is amended as follows.
(2) In article 25CA (circumstance A: tax treatment of stand-alone lump sums), in paragraph (1)—
(a)for “for the purposes of determining the income tax treatment of a stand-alone lump sum paid” substitute “in relation”;
(b)after “pension scheme” insert “to whom a stand-alone lump sum is paid”.
(3) In article 25CB (circumstance B: tax treatment of stand-alone lump sums), in paragraph (1)—
(a)for “for the purposes of determining the income tax treatment of a stand-alone lump sum paid” substitute “in relation”;
(b)after “pension scheme” insert “to whom a stand-alone lump sum is paid”.
(4) In article 25CC (circumstance C: tax treatment of stand-alone lump sums)—
(a)in paragraph (1)—
(i)for “for the purposes of determining the income tax treatment of a stand-alone lump sum paid” substitute “in relation”;
(ii)after “pension scheme” insert “to whom a stand-alone lump sum is paid”;
(b)in paragraph (5), after “death benefit allowance)” insert “has effect as if”.
12. In the Occupational Pension Schemes (Assignment, Forfeiture, Bankruptcy etc.) Regulations 1997(16), in regulation 2 (commutation of a pension under an occupational pension scheme), in paragraph (1B)(b)—
(a)after “paragraph (a)” insert “, (aa) or”;
(b)omit “or (g)”.
S.I. 2002/2006. Regulation 5(1)(o) was inserted by S.I. 2006/766. Regulation 5(1)(o) was amended by paragraph 11 of Schedule 31 to FA 2004. Column 1 of entry 10 in the Table was amended by S.I. 2006/745.
S.I. 2003/2682. Regulation 58 was amended by S.I. 2005/2691, 2007/2969, 2012/822 and 2013/521.
S.I. 2005/3454. The entry in Table 1 relating to the charge under section 244A was added by paragraph 21 of Schedule 4 to FA 2017 (c. 10). Regulation 8(1) was amended by S.I. 2014/1928. There are other amending instruments to regulation 8(3) but none is relevant.
Paragraph (2) of regulation 3 was substituted by S.I. 2013/2259. Sub-paragraph (da) was added by paragraph 22 of Schedule 4 to FA 2017 (c. 10).
Paragraph (2B) of regulation 3 was added by paragraph 22 of Schedule 4 to FA 2017.
Regulations 3AA to 3AD were added by S.I. 2015/673. The figure in regulation 3AA(3)(b) was substituted by S.I. 2018/5.
Regulation 3AE was added by paragraph 22 of Schedule 4 to FA 2017 and amended by S.I. 2019/773.
Regulation 3AG was added by paragraph 22 of Schedule 4 to FA 2017.
The entry for event 24 was inserted by paragraph 106(3) of Schedule 9 to FA 2024.
Sections 637A to 637S were added to the Income Tax (Earnings and Pensions) Act 2003 by paragraph 41 of Schedule 9 to FA 2024.
There are several amending instruments to Schedule 3 none of which is relevant.
S.I. 2006/572. Articles 25CA, 25CB and 25CC were added by paragraph 95 of Schedule 9 to FA 2024.
S.I. 1997/785. Paragraph (1B) was added by S.I. 2006/744. Schedule 3 has been amended by other instruments none of which is relevant.