SE15020 - Non-approved “retirement benefits schemes”: definition

Section 611 & 612(1) ICTA 1988

Employers frequently make financial provision for the retirement or death of their employees by setting up a pension or superannuation scheme or fund or similar arrangement. The employer may make contributions in advance in order to fund the benefits (a funded scheme or “FURBS”) or simply pay benefits on retirement or death (an unfunded scheme). All such arrangements are described in the Taxes Acts as “retirement benefits schemes”.

The statutory definition of a “retirement benefits scheme” is found at Section 611(1) ICTA 1988 ICTA88. It must be a “scheme”:

“Scheme” includes a deed, agreement, series of agreements or other arrangements. It does not have to be a formal document and non-approved schemes do not have to adopt any particular form. See SE15028 for more information.

And the “scheme” must include “relevant benefits”:

“Relevant benefits” is defined in Section 612(1) ICTA 1988 as any pension, lump sum, gratuity or other like benefit given:

• on retirement (see SE15022) or on death (see example SE15410) or
• in anticipation of retirement (see SE15125) or
• after retirement or death in connection with past service (see SE15125) or
• in connection with any change in the employee's service (see SE15125)

This means cash (see SE15120 last paragraph)

However “relevant benefits” does not include benefits provided solely by reason of an employee's disablement or death by accident occurring whilst he is in the employer's service. See example SE15415