RPSM13102180 - Technical pages: International Application of charges to non-UK schemes: Member payment charges and taxable property unauthorised payment charges: Nature of taxable property unauthorised payment charge

Nature of taxable property unauthorised payments charge

[Para 7A, Sch 34] [The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) (Amendment) Regulations 2006] SI 2006/1960

Paragraph 7A of schedule 34 provides for regulations to apply the taxable property provisions where funds have been transferred to a relevant non-UK scheme that is an investment-regulated pension scheme. It provides for a transfer member (see RPSM13102160) of such a scheme to be liable to the taxable property unauthorised payment charge in the same or similar circumstances to those in a, b or c, in which:

1. a member of a registered pension scheme is liable to a charge by virtue of section 174A and schedule 29A (see RPSM04301100) where

• • i the scheme acquires an interest in taxable property,
  • ii the scheme holds an interest in taxable property which is improved, or
  • iii the scheme holds an interest in property which is converted or adapted to become residential property.

2. the administrator of a registered pension scheme is liable to the scheme sanction charge on income or gains from taxable property by virtue of section 185A or 185F (see RPSM04301100).
3. a member of a registered pension scheme is liable to the scheme sanction charge in b as a consequence of section 273ZA (see RPSM04301100).

Broadly, The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) (Amendment) Regulations 2006 apply the taxable property unauthorised payment charge to the extent that a payment is referable to a transfer member’s taxable asset transfer fund (see RPSM13102170). They provide also for the attribution of payments to particular funds under a relevant non-UK scheme (see RPSM13102195).

The taxable property unauthorised payment charge (see RPSM04301100) is not a member payment charge under schedule 34. It applies regardless of whether or not a transfer member has been non-resident for more than five tax years. However, the reporting requirement does not apply if the relevant member is a person to who the member payment provisions do not apply under paragraph 2 of Schedule 34 (see RPSM14101070).