Citation, commencement and effect

1. —(1) These Regulations may be cited as the Registered Pension Schemes (Relevant Income) Regulations 2011 and come into force on 11th August 2011.

(2) These Regulations have effect for the tax year beginning on 6th April 2011 and subsequent tax years.

Payments not to be regarded as relevant income

2. The payments described in regulations 3 and 4 are not to be regarded as relevant income for the purpose of ascertaining whether a member or dependant satisfies the minimum income requirement in paragraphs 14A(1) or 24C(1) of Schedule 28 to the Finance Act 2004.

3. —(1) Payments of a scheme pension payable by the scheme administrator and made in respect of a defined benefits arrangement where the pension scheme under which that arrangement is made has fewer than 20 pensioner members unless the payments fall within paragraph (4) or (5).

(2) Payments of a scheme pension made in respect of a money purchase arrangement and payable by the scheme administrator where fewer than 20 pensioner members of the pension scheme under which that arrangement is made are entitled to payment of such a scheme pension unless the payments fall within paragraph (4) or (6).

(3) Payments under an overseas pension scheme which, if the scheme were a registered pension scheme would fall within paragraph (1) or (2).

(4) Paragraphs (1) and (2) do not apply in the case of payments of a scheme pension payable under an annuity contract where that annuity contract is made with an insurance company or a non-EEA annuity provider and was purchased by the application of sums and assets held for the purposes of—

(a) a registered pension scheme

(b) an overseas pension scheme, or

(c) if the purchase took place before 6th April 2006 a pension scheme which at the time of purchase fell within one of the categories set out in paragraph 1(1)(a) to (g) of Schedule 36.

(5) Paragraph (1) does not apply in the case of payments of a scheme pension or dependants’ scheme pension payable in respect of a defined benefits arrangement where—

(a) the pension scheme under which that arrangement was made (“the relevant pension scheme”) had 20 or more members in relation to whom a defined benefits arrangement was in existence on or before 5th April 2011, and

(b) the defined benefits arrangement under the relevant pension scheme was in existence in relation to the member on or before 5th April 2011.

(6) Paragraph (2) does not apply in the case of payments of a scheme pension payable under an annuity contract where that annuity contract is treated as having become a registered pension scheme under section 153(8A) of the Finance Act 2004( 3 ).

(7) For the purposes of this regulation a “non-EEA annuity provider” means a person resident in a country or territory outside the European Economic Area—

(a) whose normal business includes the provision of annuities; and

(b) who is regulated in the conduct of that business by—

(i) the government of that country or territory, or

(ii) a body established under the law of that country or territory for the purpose of regulating such business.

4. —(1) Excess payments of a lifetime annuity or dependants’ annuity unless the payments fall within paragraph (4).

(2) Excess payments are payments that exceed the amount of the minimum annuity guaranteed to be paid each year under the annuity contract for the annuity over its full term.

(3) For the purposes of this regulation “full term” means the minimum period over which a lifetime annuity or a dependants’ annuity must be payable in accordance with the applicable provision of paragraphs 3(1), 17(1)(d) or (e) of Schedule 28 to the Finance Act 2004( 4 ).

(4) Paragraph (1) does not apply to payments of a lifetime or dependants’ annuity where the annual amount of the annuity—

(a) cannot decrease, or

(b) is determined in accordance with the manner prescribed in regulation 2(2)(a)(i) (variation in line with the RPI) of the Registered Pension Schemes (Prescribed Manner of Determining Amount of Annuities) Regulations 2006( 5 ).