Finance Act 2024

Amendments of the Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006

62 (1) The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (S.I. 2006/207) are amended as follows.

(2) In regulation 1(2) (interpretation) omit the definition of “benefit crystallisation event 8”.

(3) In regulation 3 (computation of a member’s relevant transfer fund)—

(a) the existing text becomes paragraph (1);

(b) in sub-paragraph (a) of that paragraph—

(i) omit “by virtue of benefit crystallisation event 8”;

(ii) after “registered” insert “pension”;

(c) after that paragraph insert—

“(2) For the purposes of this regulation, the “amount crystallised” on a transfer from a UK registered scheme to a relevant non-UK scheme is the aggregate of the amount of any sums transferred and the market value of any assets transferred.”

(4) In regulation 3A (computation of a member’s taxable asset transfer fund)—

(a) in paragraph (1)(a) omit “by virtue of benefit crystallisation event 8”;

(b) after paragraph (2) insert—

“(3) For the purposes of this regulation, the “amount crystallised” on a transfer from a UK registered pension scheme to a relevant non-UK scheme is the aggregate of the amount of any sums transferred and the market value of any assets transferred.”

(5) In regulation 4ZB (payment and crystallisation valuation), in paragraph (9), for “paragraph 3(7C) of Schedule 29” substitute “section 278B”.

(6) In regulation 15 (modification of Schedule 29 (authorised lump sums: definitions etc))—

(a) after paragraph (1) insert—

“(1A) In paragraph 3C (pension commencement excess lump sum)—

(a) in sub-paragraph (1), after paragraph (c) insert—

“(ca) it is not paid from the relevant transfer fund of a qualifying recognised overseas pension scheme;

(cb) it is not paid from the UK tax-relieved fund of a relevant non-UK scheme.”;

(b) after sub-paragraph (4) insert—

“(5) Expressions used in sub-paragraph (1)(ca) and (cb) have the same meaning as in Schedule 34 (non-UK schemes: application of certain charges).”

(1B) In paragraph 4 (serious ill-health lump sum)—

(a) in sub-paragraph (1)(a)—

(i) for “scheme administrator” substitute “scheme manager”;

(ii) after “registered medical practitioner” insert “or a recognised medical practitioner”;

(b) at the end insert—

“(4) In sub-paragraph (1) “recognised medical practitioner” means a medical practitioner practising outside the United Kingdom who is authorised, licensed or registered to practise medicine in the country or territory, outside the United Kingdom, in which either the scheme or the member is resident.”

(1C) In paragraph 12A (references to availability of allowances) after sub-paragraph (4) insert—

“(5) Sub-paragraph (6) applies in any case in which it is necessary to determine, for the purposes of—

(a) paragraph 1 (pension commencement lump sum),

(b) paragraph 7 (trivial commutation lump sum), or

(c) paragraph 10 (winding-up lump sum),

whether all or part of a transfer member’s lump sum allowance or lump sum and death benefit allowance is available when a lump sum is paid by a recognised overseas pension scheme.

(6) Sections 637Q and 637S of ITEPA 2003 (availability of allowances) have effect as if references in those sections to relevant benefit crystallisation events were only to relevant benefit crystallisation events—

(a) occurring in relation to the recognised overseas pension scheme, and

(b) in respect of lump sums referable to the member’s relevant transfer fund (within the meaning given by paragraph 4 of Schedule 34 to FA 2004).

(7) In sub-paragraph (5) “transfer member” has the meaning given by paragraph 1(8) of Schedule 34 (non-UK schemes).””;

(b) omit paragraphs (2) to (10).

(7) In regulation 17 (modification of Schedule 34 (non-UK schemes: application of certain charges)), in the inserted paragraph 19A (Revenue and Customs discretion)—

(a) in sub-paragraph (1)—

(i) at the end of paragraph (a)(ii) insert “and”;

(ii) omit paragraph (c) and the “and” before it;

(b) in sub-paragraph (3)(b), for “to (c)” substitute “and (b)”;

(c) in sub-paragraph (4)(b), for “by” the first time it occurs substitute “be”.

(8) For regulation 18 (modification of section 636A(1B) (taxation of uncrystallised funds pension lump sum paid to member who is 75 or over)) substitute—

“18 Modifications of Chapter 15A of ITEPA 2003 in respect of relevant non-UK schemes

(1) Paragraph (2) applies where an uncrystallised funds pension lump sum is paid to a transfer member of a recognised overseas pension scheme.

(2) In determining the amount of “the permitted maximum” for the purposes of section 637D of ITEPA 2003 (income tax treatment of uncrystallised funds pension lump sums), sections 637Q and 637S of that Act (availability of allowances) have effect as if references to relevant benefit crystallisation events were only to relevant benefit crystallisation events—

(a) occurring in relation to the recognised overseas pension scheme, and

(b) in respect of lump sums referable to the member’s relevant transfer fund (within the meaning given by paragraph 4 of Schedule 34 to FA 2004).

(3) In sub-paragraph (1) “transfer member” has the meaning given by paragraph 1(8) of Schedule 34 to FA 2004 (non-UK schemes).”