PSI2.3.22 – Taxation Background: CHAPTER I PART XIV ICTA 88 - Finance (No2) Act 1987, Finance Act 1989 and Finance Act 1999 Changes - Effective Dates and Override Provisions

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

As explained in Introduction 4.12, 4.15 and 4.17, major changes were introduced by Finance (No2) Act 1987, Finance Act 1989 and Finance Act 1999 which affected both contributions to and benefits payable from occupational pension schemes. The Finance (No2) Act 1987 changes apply generally to new schemes set up on or after 17 March 1987 and to members joining existing schemes on or after that date (see, however PSI6.4.6 for the one exception to this). The Finance Act 1989 changes apply generally to new schemes set up on or after 14 March 1989 and to members joining pre-14 March 1989 schemes before 1 June 1989 (but see PSI4.3.13). The Finance Act 1999 changes apply generally to new schemes set up on or after 10 May 2000 and to members of schemes that were approved before 10 May 2000.

Finance (No2) Act 87 and Finance Acts 89 and 99 amended existing legislation to incorporate new provisions which schemes must satisfy in order to secure approval under sections 590 or 591. See Introduction 4.13, 4.16 and 4.17. They also imposed the new provisions by statutory override on schemes which had been approved before 23 July 1987, 27 July 1989 or 10 May 2000. These overriding provisions affect pension schemes approved before 23 July 1987, 27 July 1989 or 10 May 2000 in various ways and are discussed, where necessary, in the relevant Parts of these instructions.

Schemes are not expected to rely on the override provisions indefinitely and must ultimately amend their rules to comply with the statutory requirements.