SE15050 - Non-approved retirement benefits schemes: contributions made by employer excluded from charge

Section 596(2)(a) & (b) ICTA 1988

There are two statutory and one other situations in which an employer’s contribution to a non-approved 'retirement benefits scheme' is not chargeable under Section 595(1) ICTA 1988 on the employee:

• where the emoluments from the employment are outside the scope of Case I or II of Schedule E (see SE40002) for the year of assessment in which the employer's contribution is made or
• where

• the emoluments from the employment are "foreign emoluments" (that is, for someone not domiciled in the UK from a non resident employer: see SE40031) and
• the retirement benefits scheme is a "corresponding scheme". This refers to non-UK schemes which have the characteristics of a UK exempt approved scheme. Pension Schemes Technical Advice at Nottingham is responsible for deciding whether a scheme has "corresponding" status

• in practice, where a 100% deduction is allowable against the emoluments under Section 193 ICTA 1988 (see SE33000 and subsequent).

However, a charge may still arise under Section 596A ICTA 1988 in respect of lump sums etc subsequently paid out of the scheme (see SE15100)