Regulation 14 Cases where certain charges under the Finance Act 2004 apply

After regulation R2 of the Contributory Fund Regulations insert—

“Payment on behalf of participants of lifetime allowance charge

R2A

(1)

A participant or former participant may request the person who is the scheme administrator for the purposes of section 217 of the Finance Act 2004 (“the administrator”) to pay on his behalf any amount that is payable by way of the lifetime allowance charge under section 214 of the Finance Act 2004 when—

(a)

an event that is a benefit crystallisation event listed in the table in section 216(1) of the Finance Act 2004 occurs in relation to him, and

(b)

the participant or former participant and the administrator are jointly and severally liable to the charge in respect of the event.

(2)

Such a request may only be made by notice in writing given before the event occurs.

(3)

The administrator may only comply with such a request if the participant or former participant pays him the amount in question on or before the date on which the event occurs.

Reduction of benefits and transfer values where lifetime allowance charge payable

R2B

(1)

This regulation applies if—

(a)

an event that is a benefit crystallisation event listed in the table in section 216(1) of the Finance Act 2004 (“the table”) occurs in relation to a participant or former participant,

(b)

the participant or former participant and the person who is the scheme administrator for the purposes of section 217 of the Finance Act 2004 (“the administrator”) are jointly and severally liable to the charge in respect of the event, and

(c)

no request has been duly made under regulation R2A in relation to the event or, if such a request has been made, the administrator is prevented from complying with it by paragraph (3) of that regulation.

(2)

Where this regulation applies—

(a)

the administrator must pay from the Fund the tax payable on the event,

(b)

if the event is benefit crystallisation event 8 in the table (transfer to qualifying recognised overseas pension scheme), the amount or value of the sums or assets transferred must be reduced, and

(c)

in the case of any other event, the amount or value of the benefits payable to or in respect of the participant must be reduced.

(3)

The amount or value of the reduction must be such that in the opinion of the Government Actuary it fully reflects the amount of the tax paid under this regulation.

Deduction from payments of other tax due under the Finance Act 2004

R2C

(1)

This regulation applies where—

(a)

a payment is made under Part M of or Schedule 13 to these Regulations that is a pension protection lump sum death benefit for the purposes of Part 4 of the Finance Act 2004 (see paragraph 14 of Schedule 29 to that Act), or

(b)

a repayment of contributions (including interest on contributions) is made under Part N of or Schedule 14 to these Regulations that is a short service refund lump sum for the purposes of Part 4 of that Act (see paragraph 5 of Schedule 29 to that Act).

(2)

Before making the payment the person who is the scheme administrator for the purposes of section 217 of that Act may deduct from it any tax due in respect of it under—

(a)

section 206 of that Act (the special lump sum death benefits charge), or

(b)

section 205 of that Act (short service refund lump sum charge).”.

Omit regulation N5 (deduction of tax from contributions).