Finance Act 2000 (c. 17)

(The document as of February, 2008)

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(7) In subsection (4) (reduction of maximum deduction or set off where employer makes contributions) for "that may be deducted or set off" substitute "of contributions in respect of which relief may be given by virtue of section 639(1)".

(8) Sub-paragraphs (2), (4) and (7) have effect in relation to contributions paid in the year 2001-02 or any subsequent year of assessment.

(9) Sub-paragraphs (5) and (6) have effect in relation to contributions paid to secure benefits satisfying the conditions in section 637 of the Taxes Act 1988 where the contract of life assurance concerned is made on or after 6th April 2001.

Carry-back of contributions

17 No election shall be made under section 641 in respect of contributions paid on or after 6th April 2001.

Election for contributions to be treated as paid in previous year

18 (1) After section 641 insert--

" 641A Election for contributions to be treated as paid in previous year

(1) A person who pays a contribution under approved personal pension arrangements on or before the 31st January in any year of assessment may, at or before the time when he pays the contribution, irrevocably elect that the contribution, or part of it, shall be treated as paid in the preceding year of assessment.

(2) Where an election is made under this section in respect of a contribution or part of a contribution, the other provisions of this Chapter shall have effect as if the contribution or part had been paid in the year specified in the election and not in the year in which it was actually paid. " .

(2) This paragraph has effect in relation to contributions paid in the year 2001-02 or any subsequent year of assessment.

Abolition of carry-forward of relief

19 No relief shall be given by virtue of section 642 (carry-forward of relief) in the year 2001-02 or any subsequent year of assessment.

Earnings from pensionable employment

20 (1) Amend section 645 as follows.

(2) In subsection (3) (definition of "a relevant superannuation scheme") omit the word "and" immediately preceding paragraph (c) and at the end of that paragraph add " ; and

(d) which is not an approved converted scheme " .

Meaning of "net relevant earnings"

21 (1) Amend section 646 as follows.

(2) In subsection (5) (cases where the whole or part of a deduction under subsection (2)(d) falls to be made from income other than relevant earnings) for "an amount is deducted or set off under section 639(1) against the net relevant earnings" substitute "the basic rate limit is increased in accordance with section 639(5A) in the case".

(3) In subsection (6) (reduction of net relevant earnings in subsequent years) for "under section 639(1)" substitute "in accordance with section 639(5A)".

(4) Omit subsection (7) (net relevant earnings to be computed without regard to any deduction or set off under section 639(1)).

(5) This paragraph has effect for the year 2001-02 and subsequent years of assessment.

Presumption of same level of relevant earnings etc for 5 years

22 (1) After section 646A insert--

" 646B Presumption of same level of relevant earnings etc for 5 years

(1) This section applies where an individual (the "relevant member") who is or becomes a member of a personal pension scheme provides to the scheme administrator the requisite evidence of the relevant amounts for any year of assessment (the "basis year").

(2) For the purposes of this section, the "relevant amounts" for any year of assessment are the amounts which need to be known in order to calculate the relevant member's net relevant earnings for that year.

(3) The basis year need not be a year of assessment in which the relevant member is a member of the personal pension scheme concerned.

(4) Where this section applies, it shall be presumed for the purposes of this Chapter in the case of the relevant member and the personal pension scheme concerned that, for each of the five years of assessment following the basis year, the relevant amounts (and, accordingly, the relevant member's net relevant earnings) are the same as for the basis year.

(5) Subsection (4) above is subject to--

(a) subsections (6) to (9) below; and

(b) such conditions or exceptions as may be prescribed.

(6) For the purposes of this section, the requisite evidence provided for a later basis year (the "later basis year") supersedes the requisite evidence provided for an earlier basis year (the "earlier basis year").

(7) Subsection (6) above has effect subject to, and in accordance with, subsections (8) and (9) below.

(8) If--

(a) the actual net relevant earnings for the later basis year,

exceed

(b) the actual net relevant earnings for the earlier basis year,

the supersession effected by subsection (6) above has effect as respects the later basis year and subsequent years of assessment (and subsection (4) above applies accordingly).

(9) Where the condition in subsection (8) above is not satisfied, the supersession effected by subsection (6) above has effect only as respects years of assessment later than the last of the five years of assessment following the earlier basis year (and subsection (4) above applies accordingly).

(10) It is immaterial for the purposes of this section whether the requisite evidence for a later year of assessment is provided before or after, or at the same time as, the requisite evidence for an earlier year of assessment.

(11) This section is subject to section 646D.

646C Provisions supplementary to section 646B

(1) In this section and section 646B, "requisite evidence" means evidence--

(a) of such a description as may be prescribed;

(b) in such form as may be prescribed; and

(2) Regulations may make further provision in connection with requisite evidence.

(3) The provision that may be made by regulations under subsection (2) above includes provision for or in connection with the provision, use, retention, production or inspection of, or of copies of,--

(a) requisite evidence;

(b) books, documents or other records relating to any requisite evidence; or

(4) Any power to make regulations under this section or section 646B includes power to make different provision for different cases or different purposes.

(5) In this section and section 646B--

"prescribed" means specified in or determined in accordance with regulations;
"regulations" means regulations made by the Board. " .

(2) Sub-paragraph (1) above has effect in relation to presumptions for the year 2001-02 and subsequent years of assessment.

Higher level contributions after cessation of actual relevant earnings: modification of section 646B

23 (1) After section 646C insert--

" 646D Higher level contributions after cessation of actual relevant earnings: modification of section 646B

(1) This section applies where a member of a personal pension scheme--

(a) has no actual relevant earnings in a year of assessment (the "break year"); but

(b) had actual relevant earnings in the preceding year of assessment (the "cessation year"); and

(c) was entitled to make higher level contributions under arrangements under the scheme in any one or more of the six years of assessment preceding the break year (the "reference years").

(2) In the application of the presumption in subsection (4) of section 646B for any qualifying post-cessation year, in a case where this section applies, the basis year may be any one of the reference years for which the member provides or has provided the requisite evidence--

(a) notwithstanding anything in subsections (6) to (9) of that section; and

(b) whether or not the qualifying post-cessation year is included among the five years of assessment following the basis year.

(3) If the member provides or has provided the requisite evidence for two or more of the reference years, he may by notice in writing to the scheme administrator nominate that one of those years which is to be the basis year by virtue of subsection (2) above.

(4) In this section "post-cessation year", in the case of the member concerned, means any of the five years of assessment following the cessation year.

(5) For the purposes of this section any post-cessation year is a "qualifying" post-cessation year unless--

(a) it is a year for which the member has any actual relevant earnings;

(b) it is a year throughout which the member holds an office or employment to which section 645 applies; or

(6) Subsection (5) above is without prejudice to the further application of this section in relation to the member if the conditions in subsection (1) above are again fulfilled.

(7) In this section--

"the basis year" shall be construed in accordance with section 646B;
"the requisite evidence" has the same meaning as in that section. " .

(2) This paragraph has effect where the break year is the year 2001-02 or any subsequent year of assessment.

Appeals

24 (1) Amend section 651 as follows.

(2) In subsection (1)(a) (appeal against refusal of application under section 631) after "section 631" insert "or paragraph 3 of Schedule 23ZA".

Old transitional provisions

25 (1) Amend section 655 as follows.

(2) In subsection (1)(a) (reduction of relief under section 639 where relief is given for certain qualifying premiums) for "that may be deducted or set off" substitute "of contributions in respect of which relief may be given".

(3) This paragraph has effect for the year 2001-02 and subsequent years of assessment.

Benefits under approved pension arrangements not to be income of settlor

26 (1) Amend section 660A (income arising under settlement where settlor retains an interest) as follows.

(2) Omit subsection (7) (irrevocable allocation of certain pension rights between spouses not to be regarded as settlement).

(3) In subsection (9) (descriptions of income to which subsection (1) does not apply) at the end of paragraph (b) add " ; or

(4) After subsection (10) add--

" (11) In this section "approved pension arrangement" means--

(a) an approved scheme or exempt approved scheme;

(b) a relevant statutory scheme;

(c) a retirement benefits scheme set up by a government outside the United Kingdom for the benefit, or primarily for the benefit, of its employees;

(d) a contract or scheme which is approved under Chapter III of Part XIV (retirement annuities);

(e) a personal pension scheme which is approved under Chapter IV of that Part;

(f) an annuity purchased for the purpose of giving effect to rights under a scheme falling within any of paragraphs (a) to (c) and (e) above;

(g) any pension arrangements of any description which may be prescribed by regulations made by the Secretary of State.

(12) In subsection (11) above "approved scheme", "exempt approved scheme", "relevant statutory scheme" and "retirement benefits scheme" have the same meaning as in Chapter I of Part XIV. " .

(5) This paragraph has effect for the year 2001-02 and subsequent years of assessment.

Conversion of certain approved retirement benefits schemes

27 After Schedule 23 insert--

Section 631A.

" SCHEDULE 23ZA Conversion of certain approved retirement benefits schemes

Interpretation

1 (1) In this Schedule--

"the date of the change" shall be construed in accordance with paragraph 3(2) below;
"eligible scheme" shall be construed in accordance with paragraph 2(4) below;
"the personal pension provisions of this Act" means this Schedule and the other provisions of Chapter IV of Part XIV;
"prescribed" (except in paragraph 2(3)(c)) means specified in, or determined in accordance with, regulations;
"regulations" means regulations made by the Board.

(2) Any power conferred by this Schedule to make regulations includes power to make different provision for different cases or different purposes.

Eligible schemes

2 (1) This Schedule applies to any retirement benefits scheme which is for the time being approved under Chapter I of Part XIV.

(2) Sub-paragraph (1) above is subject to the following provisions of this paragraph.

(3) This Schedule applies to a retirement benefits scheme only if--

(a) it is an occupational pension scheme, as defined in section 1 of the [1993 c. 48.] Pension Schemes Act 1993 or section 1 of the [1993 c. 49.] Pensions Schemes (Northern Ireland) Act 1993;

(b) it is a money-purchase scheme, as defined in section 181 of the [1993 c. 48.] Pension Schemes Act 1993 or section 176 of the [1993 c. 49.] Pensions Schemes (Northern Ireland) Act 1993;

(c) any documents relating to the scheme which are prescribed under section 631(1) are such that, subject to approval under paragraph 3 below, the scheme is capable of being an approved personal pension scheme for the purposes of Chapter IV of Part XIV as from the date of the change; and

(d) such other conditions as may be prescribed are satisfied in the case of the scheme.

(4) Any retirement benefits scheme to which this Schedule applies is referred to in this Schedule as an "eligible scheme".

Approval of eligible schemes as approved personal pension schemes

3 (1) The trustees of an eligible scheme may at any time on or after 1st October 2000 apply to the Board for approval of the scheme under this paragraph.

(2) If an application under sub-paragraph (1) above is granted, the eligible scheme shall, as from such date as the Board may specify in granting the application (the "date of the change"),--

(a) irrevocably cease to be approved, and to be capable of approval, under Chapter I of Part XIV; and

(b) become an approved personal pension scheme (and subject accordingly to section 631(4) and the other provisions of Chapter IV of Part XIV).

(3) The date of the change must not be earlier than 6th April 2001.

(4) An application under sub-paragraph (1) above shall be in such form, shall contain such information, and shall be accompanied by such documents, in such form, and prepared as at such time, as the Board may prescribe.

(5) The Board may at their discretion grant or refuse an application under sub-paragraph (1) above.

(6) The Board's discretion under sub-paragraph (5) above shall be subject to the restrictions set out in sections 632 to 638A and this Schedule.

(7) The Board shall give notice to the applicant of the grant or refusal of an application.

(8) A notice under sub-paragraph (7) above shall, in the case of a refusal, state the grounds for the refusal.

(9) If, at any time after the making of an application under sub-paragraph (1) above, the eligible scheme concerned ceases to be approved under Chapter I of Part XIV otherwise than by virtue of the operation of sub-paragraph (2)(a) above, the scheme shall not, by virtue of that application, become an approved personal pension scheme.

Excessive funding of certain individual members

4 (1) The Board may refuse or withhold approval under paragraph 3 above in the case of an eligible scheme of a prescribed description if or so long as they are not satisfied that prescribed requirements will be fulfilled with respect to--

(a) the value of any prescribed benefits which may be provided for or in respect of an individual member of a prescribed description, and

(b) the value of the assets held for the purpose of providing benefits for or in respect of that member,

if approval under paragraph 3 above is granted.

(2) Regulations may make provision for or in connection with cases where the value mentioned in paragraph (b) of sub-paragraph (1) above exceeds, or exceeds by more than a prescribed percentage, the value mentioned in paragraph (a) of that sub-paragraph.

(3) The provision that may be made by virtue of sub-paragraph (2) above includes provision for or in connection with eliminating or reducing any such excess within a prescribed period by one or more prescribed methods.

(4) Regulations may make provision for the purposes of this paragraph for or in connection with--

(a) the valuation of benefits; or

(b) the valuation of assets.

(5) The provision that may be made by virtue of sub-paragraph (4)(a) or (b) above includes provision with respect to, or in connection with,--

(a) the person by whom any such valuation is to be made;

(b) the method or principles of valuation to be used;

(d) any facts, matters or assumptions by reference to which any such valuation is to be made;

(e) any tables to be used for the purpose of making any such valuation;

(f) the basis on which any such tables are to be prepared;

(g) the manner in which any such tables are to be applied.

(6) The methods or principles of valuation and the tables that may be prescribed by virtue of sub-paragraph (5) above include methods or principles or, as the case may be, tables published by the Government Actuary for any purposes of the personal pension provisions of this Act.

Directions as to contributions between valuation and date of change etc.

5 (1) The Board may give directions for or in connection with--

(a) prohibiting the making of contributions during the post-valuation period, or

(b) restricting the amount of the contributions that may be made during that period,

by or in respect of members of a converting scheme.

(2) Directions under sub-paragraph (1) above--

(a) may be given in respect of schemes generally, schemes of a particular description or any particular scheme or schemes; and

(b) may make different provision in relation to different schemes or different members.

(3) Any directions under sub-paragraph (1) above must be complied with by--

(a) the trustees and managers, or administrators, of any scheme to which the directions relate;

(b) any member of such a scheme to whom the directions relate; and

(4) If there is any contravention of, or failure to comply with, directions under sub-paragraph (1) above, the Board may--

(a) refuse or withhold approval of the conversion application in question; or

(b) revoke or vary any approval granted or any conditions pending the satisfaction of which approval is withheld.

(5) Sub-paragraph (4) above is without prejudice to any other powers of the Board.

(6) In this paragraph--

"conversion application", in the case of a converting scheme, means the application under paragraph 3(1) above in respect of the scheme;
"converting scheme" means a scheme in respect of which an application under paragraph 3(1) above has been made and not withdrawn or finally refused;
"the post-valuation period", in the case of a converting scheme, means the period which--
(a)
begins with the day as at which any valuation for the purposes of paragraph 4 above is made in connection with the conversion application; and
(b)
ends with the day preceding the date of the change (or, if earlier, the date on which the conversion application is withdrawn or finally refused).

(7) For the purposes of this paragraph, an application is "finally refused" when it has been refused by the Board and--

(a) the time for appealing under section 651 against the refusal has expired without such an appeal being made; or

(b) an appeal under that section against the refusal has been withdrawn or finally disposed of in a way which affirms refusal of the application.

(8) Any directions under this paragraph must be given in writing.

Scheme rules to allow changes for purpose of conversion

6 An approved retirement benefits scheme shall be taken to include provisions allowing the making of changes to any provisions of the scheme for the purpose of enabling the scheme to become an eligible scheme, notwithstanding anything to the contrary in any provision of the scheme. " .

Part II Transitional provisions

Schemes approved before 6th April 2001 deemed to contain certain provisions

28 (1) This paragraph applies to any personal pension scheme which is or has been approved under Chapter IV of Part XIV of the Taxes Act 1988 before 6th April 2001 (an "existing approved scheme").

(2) An existing approved scheme shall be deemed to include provision prohibiting, in relation to arrangements made by a member in accordance with the scheme, the acceptance of--

(a) contributions by the member, or

(b) contributions by an employer of the member,

at a time when the member is not eligible to make contributions.

(3) An existing approved scheme shall be deemed to include provision, in relation to arrangements made by a member in accordance with the scheme, requiring that contributions accepted at a time when the member is not eligible to make contributions are repaid--

(a) to the member, to the extent of his contributions, and

(b) as to the remainder, to his employer,

except that, in a case falling within subsection (6) of section 632B of the Taxes Act 1988, the contributions required to be repaid shall be determined in accordance with that subsection (and their repayment shall have the like consequence).

(4) An existing approved scheme shall be taken to include provisions prohibiting the scheme from making provision for any benefit so far as consisting of insurance against a risk relating to the non-payment of contributions where--

(a) the benefit, so far as so consisting, does not fall within one or more of the paragraphs of section 633(1) of the Taxes Act 1988; and

(b) the insurance is under a contract of insurance made on or after 6th April 2001.

(5) Sections 646B to 646D of the Taxes Act 1988, and any regulations made under those sections, override any provision of an existing approved scheme to the extent that it conflicts with them.

(6) An existing approved scheme shall be deemed to include provision entitling any member who is eligible to make contributions in a year of assessment under arrangements made by him under the scheme to make contributions in that year up to the earnings threshold for the year.

(7) Nothing in sub-paragraph (6) authorises the making, in the case of any member, of total contributions in a year of assessment which exceed the earnings threshold for the year or, if greater, the permitted maximum for the year.

(8) In this paragraph--

"approved personal pension arrangements" has the same meaning as in Chapter IV of Part XIV of the Taxes Act 1988 (see section 630(1) of that Act);
"earnings threshold" has the same meaning as in Chapter IV of Part XIV of the Taxes Act 1988 (see section 630(1) of that Act);
"eligible to make contributions" shall be construed in accordance with sections 632A and 632B of the Taxes Act 1988;
"the permitted maximum" has the same meaning as in section 638(3) of the Taxes Act 1988;
"personal pension scheme" has the same meaning as in Chapter IV of Part XIV of the Taxes Act 1988 (see section 630(1) of that Act);
"total contributions", in the case of a member and a year of assessment, means the aggregate amount of the contributions made in the year by the member and any employer of his under the approved personal pension arrangements in question, together with the aggregate amounts of such contributions under other approved personal pension arrangements made by that member.

Deemed requisite evidence for the presumptions

29 (1) This paragraph applies where, in the case of any individual and any arrangements made by him under an approved personal pension scheme,--

(a) the conditions in regulations 5 and 6 of the [S.I. 1998/1013.] Personal Pension Schemes (Relief at Source) Regulations 1988 ("the 1988 Regulations") are satisfied for one or more of the five years of assessment preceding the year 2001-02;

(b) the particulars specified in regulation 5(2)(e) of the 1988 Regulations have been furnished for a year of assessment ("the relevant year") for which those conditions are satisfied and which is one of those five years of assessment; and

(c) such a certificate as is specified in regulation 6(2)(a) of the 1988 Regulations has been furnished at some time during, or not later than 60 days after the end of, such a year of assessment.

(2) Where this paragraph applies, it shall be assumed for the purposes of sections 646B to 646D of the Taxes Act 1988--

(a) that the individual has provided the scheme administrator with the requisite evidence of the relevant amounts for the relevant year; and

(b) that the relevant amounts for that year are the amounts stated in, or deduced from, the relevant particulars and certificates.

(3) In sub-paragraph (2) above, "the relevant particulars and certificates" means the latest particulars and certificates furnished under regulations 5 and 6 of the 1988 Regulations by reference to which the relevant year is a year for which the conditions prescribed in those regulations are satisfied.

Applications for approval

30 (1) An application to the Board for their approval under Chapter IV of Part XIV of the Taxes Act 1988 of--

(a) a personal pension scheme, or

(b) an amendment to a personal pension scheme approved under that Chapter,

may not be made before 1st October 2000 if the scheme or amendment makes or includes any provision such that the Board could not give their approval apart from the amendments made to the Taxes Act 1988 by the relevant provisions of this Schedule.

(2) For the purposes of sub-paragraph (1) the relevant provisions of this Schedule are any provisions of this Schedule other than paragraphs 10 and 12(3).

Section 62.

SCHEDULE 14 Enterprise management incentives

Part I Introductory

Qualifying options

1 (1) In this Schedule a "qualifying option" means an option--

(a) in relation to which the requirements of this Schedule are met at the time the option is granted, and

(b) of which notice is given to the Inland Revenue in accordance with paragraph 2.

(2) The requirements of this Schedule are--

(a) the general requirements in Part II of this Schedule,

(b) that the company whose shares are the subject of the option is a qualifying company (see Part III of this Schedule),

(c) that the individual to whom the option is granted is an eligible employee in relation to that company (see Part IV of this Schedule),

(d) that the option is granted to the employee by reason of his employment--

(i) with that company, or

(ii) if that company is a parent company, with that company or another group company, and

(e) the requirements of Part V of this Schedule as to the terms of the option, the circumstances in which it is granted and other matters.

(3) In this Schedule, in relation to an option--

(a) references to "the relevant company" are to the company whose shares are the subject of the option, and

(b) references to "the employer company" are to the company by reference to which the requirement in sub-paragraph (2)(d) is met.

Notice of option to be given to Inland Revenue

2 (1) For an option to be a qualifying option notice of the option must be given to the Inland Revenue within 30 days after the grant of the option.

(2) The notice must--

(a) be given by the employer company, and

(b) be in a form required or authorised by the Inland Revenue.

(3) The notice must contain, or be supported by, such information as the Inland Revenue may require for the purpose of determining whether the requirements of this Schedule are met.

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