PSI17.1.12 - Tax Treatment of Approved Schemes and Payments by Approved Schemes: Tax Treatment of Approved Schemes - Open Market Options

(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)

[PN17.19]

Most Life Offices give scheme trustees an option to buy the benefits on the open market when they fall due rather than taking them from the insurer under the policy. This enables the trustees to shop around for the best deal available. Contracts to secure immediate benefits under an open market option will qualify for pension business treatment if they correspond. This will normally be the case if they provide an immediate annuity with no option other than for immediate commutation (see PSI17.1.13c.) and/or allocation in accordance with the scheme rules.

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