PTM053390 - Annual allowance: pension input amounts: defined benefits arrangements: anti-avoidance rule for post-entitlement enhancements

Section 236A Finance Act 2004

An anti-avoidance rule applies in relation to a defined benefits arrangement (and accordingly a hybrid arrangement) if, during a pension input period (바카라 사이트渢he affected pension input period바카라 사이트�), the individual enters into a scheme for the making of an avoidance-inspired post-entitlement enhancement.

A 바카라 사이트榩ost-entitlement enhancement바카라 사이트� is an increase in the annual rate of a scheme pension under the arrangement, at a time after the member has become entitled to the scheme pension.

A post-entitlement enhancement is 바카라 사이트榓voidance-inspired바카라 사이트� if the main purpose, or one of the main purposes, of the individual in entering into the scheme was to avoid or reduce a liability to the annual allowance charge.

The tax rules relating to pension schemes etc in Part 4 of Finance Act 2004 have effect in relation to the arrangement and the individual, as respects the affected pension input period and all subsequent pension input periods, as if:

  • The 바카라 사이트榦pening value바카라 사이트� and 바카라 사이트榗losing value바카라 사이트� aspects of the pension input amount calculation were modified as described below, and
  • The CPI uprating of the opening value (바카라 사이트楽tep 4바카라 사이트� in PTM053301) and the possible adjustments to the closing value (see PTM053301) did not apply.

The modification to the opening value part of the pension input amount calculation is that the opening value is calculated as:

such amount as, applying normal actuarial practice, is the expected cost of giving effect to the individual바카라 사이트檚 rights under the arrangement at the end of the immediately preceding pension input period (or is nil if the pension input period is the first pension input period of the arrangement).

The modification to the closing value part of the pension input amount calculation is that the closing value is calculated as:

such amount as, applying normal actuarial practice, is the expected cost of giving effect to the individual바카라 사이트檚 rights under the arrangement at the end of the pension input period.

Note - for the purpose of this anti-avoidance rule, 바카라 사이트榮cheme바카라 사이트� includes any arrangements, agreement, understanding, transaction or series of transactions (whether or not legally enforceable).

Note - the term 바카라 사이트榮cheme바카라 사이트� is used here in the sense of avoidance devices rather than pension schemes.