RPSM02104040 - Technical pages: Registering a pension scheme with HMRC: deferred annuity contracts (buyout policies, section 32 contracts and assigned policies): Policies or contracts set up/assigned on or after 6 April 2006

Policies or contracts set up/assigned on or after 6 April 2006

HMRC will automatically treat a deferred annuity contract (includes a section 32 policy, a buyout policy and an assigned policy) as a registered pension scheme where

• funds are transferred to the policy or contract (or the policy is assigned to the scheme member) on or after 6 April 2006, and
• the funds or policy came from a registered pension scheme.

The deferred annuity contract is treated as having automatically become a registered pension scheme on the day on which the contract is made (or the day the policy assignment is completed).

The scheme administrator does not have to complete the entire registration application process on-line. However, they must make the declarations required by section 270 Finance Act 2004, using Pension Schemes Online. This is a much lesser requirement than formally registering the scheme. For more guidance on the procedure for making the required declarations, please see RPSM02306150

Treating these policies or contracts as registered pension schemes means that when the member takes their benefits, there will be a benefit crystallisation event. The funds being taken at that time will be counted for the member's lifetime allowance - just as they would have been counted for the member's lifetime allowance had they remained in the original pension scheme.