(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)
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
[PN17.9]
The investment income surcharge was abolished for most
taxpayers by section 17 Finance Act 1984. But the charge to
additional rate tax still applies to the income of certain
discretionary and accumulation trusts within section 686 ICTA 1988.
This section applies to income which is accumulated or which is
payable at the discretion of the trustees or any other person. A
scheme which is established for the sole purpose of providing
relevant benefits within the meaning of section 612 ICTA 1988 is
exempted from this additional rate charge by section 686(2)(c) ICTA
1988. The exemption applies to any scheme, approved or unapproved,
(viz a “top-up” scheme) that satisfies the “sole
purpose” test in the benefits it gives. Submit any enquiries
about section 686 or whether a scheme satisfies the “sole
purpose” test, to the Section Manager unless the scheme is
fully exempt approved or is partially approved (see
PSI17.1.4.).
