(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)
Section 590(2) sets out the general conditions for
approval. These are mainly designed to show the genuine nature of a
scheme and to provide safeguards for the Revenue. They are (using
the paragraphs in section 590(2)):
a. The scheme must be a bona fide pension scheme whose sole purpose is the provision of "relevant benefits" (as defined in section 612) in respect of an employee’s service although the benefits payable to the employee can be paid to the employee’s ex-spouse following a pension sharing on divorce order.
aa. The relevant benefits must only be paid to
an employee (or former employee), or
the ex-spouse of an employee (or former employee), or
the widow, widower, child, dependant or the personal representatives of
an employee (or former employee), or
the ex-spouse of an employee (or former employee), or
b. The scheme should be recognised by both employer and employees, and employees who are eligible for membership must be given full particulars about it (see PSI18.1.23- 24).
c. There needs to be a person resident in the United Kingdom whom the Revenue can hold responsible for the proper administration of the scheme.
d. The employer must contribute to the scheme (see PSI5.1.1).
e. The scheme has to be set up by a United Kingdom employer in connection with a trade or undertaking carried on in this country (but see section 591(2)(f)).
f. Employees' contributions must not be refundable (but see section 591(2)(e)).
