PSI25.1.11 - Flexibility in Pension Provision – Introduction – Endorsement of Buy-out Contracts

(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)

To incorporate the flexibility provisions, a variation will be required by way of an endorsement to the contract. It is the responsibility of the Life Offices to ensure that they have the necessary powers to endorse a buy-out contract. If the contract is not capable of variation, then it will not be possible to take advantage of the arrangements.

Buy-out contracts can be endorsed using the following wording:

"Notwithstanding anything to the contrary in the buy-out contract the options in Parts I, II and III of the Appendix XII dated 08/2001 of IR 12 (2001) may be applied to the benefits arising under the contract with the consent of the Life Office".

IR SPSS do not need to be informed when a buy-out contract is endorsed to adopt the flexibility provisions. We do not require a copy of the endorsement.