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Section 182 Unauthorised borrowing: money purchase arrangements other than collective money purchase arrangementsF10I1C1C2C3

United Kingdom

(1)

A registered pension scheme is not authorised to borrow an amount in respect of a money purchase arrangement F1that is not a collective money purchase arrangement unless the arrangement borrowing condition is met.

(2)

The arrangement borrowing condition is met if—

(APB+PB)<VA2

where—

APB is the aggregate of the amounts previously borrowed in respect of the arrangement (excluding any amounts which have been repaid),

PB is the amount proposed to be borrowed in respect of the arrangement, and

VA is the value of the arrangement.

(3)

The value of the arrangement is the aggregate of—

(a)

the amount of such of the sums and the market value of such of the assets as represent the F2member's drawdown pension fund in respect of the arrangement (if any),

F3(aa)

the amount of such of the sums and the market value of such of the assets as represent the member's flexi-access drawdown fund in respect of the arrangement (if any),

(b)

the amount of such of the sums and the market value of such of the assets as represent F4dependants' drawdown pension funds F5or dependants' flexi-access drawdown funds in respect of the arrangement (if any),

F6(ba)

the amount of such of the sums and the market value of such of the assets as represent nominees' flexi-access drawdown funds in respect of the arrangement (if any),

(bb)

the amount of such of the sums and the market value of such of the assets as represent successors' flexi-access drawdown funds in respect of the arrangement (if any),

(c)

the aggregate of the value of each scheme pension or dependants' scheme pension payable in respect of the arrangement, and

(d)

the value of the uncrystallised rights under the arrangement.

(4)

The value of a scheme pension or dependants' scheme pension payable in respect of the arrangement is—

RVF×ARP

where—

RVF is the relevant valuation factor (see section 276), and

ARP is the annual rate at which the pension is payable.

(5)

Rights are uncrystallised if no-one has become entitled to the present payment of benefits in respect of the rights; and a person is to be treated as entitled to the present payment of benefits in respect of the sums and assets representing the person’s F7drawdown pension fund F8or the person's flexi-access drawdown fund.

(6)

If the arrangement is a cash balance arrangement, the value of the uncrystallised rights under the arrangement is the amount which would, on the valuation assumptions (see section 277), be available for the provision of benefits in respect of those rights if a person became entitled to benefits in respect of those rights.

(7)

If the arrangement is a money purchase arrangement other than a cash balance arrangement, the value of the uncrystallised rights under the arrangement is the aggregate of the amount of such of the sums, and the market value of such of the assets, held for the purposes of the arrangement as represent those rights.

(8)

If the arrangement is a hybrid arrangement under which either cash balance benefits or other money purchase benefits (but not defined benefits F9or collective money purchase benefits) may be provided, the value of the uncrystallised rights under the arrangement is the greater of—

(a)

their value calculated under subsection (6) (on the assumption that cash balance benefits are provided), and

(b)

their value calculated under subsection (7) (on the assumption that other money purchase benefits are provided).

Annotations

Textual amendments

F1

Words in s. 182(1) inserted (1.8.2022) by Finance Act 2021 (c. 26), Sch. 5 paras. 6(3), 25(1); S.I. 2022/874, reg. 2

F2

Words in s. 182(3)(a) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 70(2)(a)

F3

S. 182(3)(aa) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 11(a)

F4

Words in s. 182(3)(b) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 70(2)(b)

F5

Words in s. 182(3)(b) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 11(b)

F6

S. 182(3)(ba)(bb) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 13

F7

Words in s. 182(5) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 70(3)

F8

Words in s. 182(5) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 12

F9

Words in s. 182(8) inserted (1.8.2022) by Finance Act 2021 (c. 26), Sch. 5 paras. 6(4), 25(1); S.I. 2022/874, reg. 2

F10

Words in s. 182 heading inserted (1.8.2022) by Finance Act 2021 (c. 26), Sch. 5 paras. 6(2), 25(1); S.I. 2022/874, reg. 2

Modifications

C1

Ss. 182-185 excluded (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 16

C2

S. 182 modified (retrospective to 6.4.2011) by Finance Act 2011 (c. 11), s. 68(2)(6)

C3

S. 182 restricted (retrospective to 6.4.2011) by Finance Act 2011 (c. 11), s. 68(1)(6)

Commencement

I1

Ss. 160-274, 281, Schs. 30-35 in force at 6.4.2006 but any power to make an order or regulations under those provisions may be exercised at any time after Royal Assent, see s. 284

Notes on Part 4

Modifications

C1

Pt. 4 modified (N.I.) (1.4.2006) by The Firemens Pension Scheme Order (Northern Ireland) 2006 (S.R. 2006/210), arts. 1(2), 103

C2

Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 9, 10

C3

Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 12

C4

Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 13(5)

C5

Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 26

C6

Pt. 4 modified (31.12.2007) by Police and Justice Act 2006 (c. 48), s. 53(1), Sch. 3 para. 7; S.I. 2007/3203, art. 3(b)

C7

Pt. 4 modified (1.7.2008) (N.I.) (with effect in accordance with reg. 1 of the amending Rule) by The Health and Social Care (Pension Scheme) Regulations (Northern Ireland) 2008 (S.R. 2008/256), regs. 1, 124(1) (with regs. 134, 258)

C8

Pt. 4 modified by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), reg. 5A (as inserted (6.4.2006) by S.I. 2008/2990, arts. 1(1), 3)

C9

Pt. 4 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 35 para. 18

C10

Pt. 4 modified (19.7.2011) by Finance Act 2011 (c. 11), Sch. 18 para. 14(3)

C11

Pt. 4 applied (with modifications) (with application in accordance with Sch. 22 para. 1 of the amending Act) by Finance Act 2013 (c. 29), Sch. 22 para. 1(2)

C12

Pt. 4 modified (17.7.2014) by Finance Act 2014 (c. 26), Sch. 6 para. 1(2)(3)

C13

Pt. 4: power to amend conferred (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), s. 4(3)

C14

Pt. 4 modified (15.9.2016) by Finance Act 2016 (c. 24), Sch. 4 para. 1

C15

Pt. 4 modified (15.9.2016) by Finance Act 2016 (c. 24), Sch. 4 para. 9(2)

C16

Pt. 4 modified (with effect in relation to the tax year 2024-25 and subsequent tax years) by The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52), regs. 1(2)(3), 6

C17

Pt. 4 modified (14.7.2026 for the tax year 2014-15 and subsequent tax years) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2026 (S.I. 2026/673), regs. 1(2), 10

Notes on Chapter 3

Modifications

C1

Pt. 4 modified (19.7.2011) by Finance Act 2011 (c. 11), Sch. 18 para. 14(3)

C2

Pt. 4 modified (with effect in relation to the tax year 2024-25 and subsequent tax years) by The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52), regs. 1(2)(3), 6