Explanatory note

These Regulations apply where living accommodation is owned partly by a registered pension scheme and partly by other persons. The Regulations provide for a charge to income tax to arise in certain circumstances.

Regulation 1 provides for citation and commencement.

Regulation 2 sets out the circumstances in which these Regulations apply.

Regulation 3 provides that, if these regulations apply, there is a benefit (“the living accommodation benefit”). The living accommodation benefit is calculated in the same way as a benefit is calculated under Chapter 5 of Part 3 of the Income Tax (Employments and Pensions) Act 2003 (c. 1) (taxable benefits: living accommodation).

Regulation 4 provides for the living accommodation benefit to be apportioned, with the amount apportioned to the registered pension scheme being called “the pension scheme owner’s benefit”.

Regulation 5 provides for the pension scheme owner’s benefit to be apportioned, with the amount finally apportioned to a scheme member being referred to as “the private owner’s benefit”.

Regulation 6 provides that the registered pension scheme is to be treated as having made an unauthorised payment to the scheme member to whom an amount has been apportioned under regulation 5. The amount of the unauthorised payment is the same as the amount of the private owner’s benefit.

Other enactments, contained in Part 4 of the Finance Act 2004 (c. 12), provide for an unauthorised payment to be charged to income tax: see, in particular, section 208 of that Act (unauthorised payments charge).

The Board of Inland Revenue published a regulatory impact assessment in respect of the provisions of Part 4 of the Finance Act 2004 and subordinate legislation under it, on 8 April 2004. The assessment is available on the website for Her Majesty’s Revenue and Customs at www.hmrc.gov.uk/ria/simplifying-pensions.pdf or (for hard copies) by writing to the Ministerial Correspondence Unit, 1st Floor Ferrers House, PO Box 38, Castle Meadow Road, Nottingham, NG2 1BB.