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HMRC internal manual

Employment Income Manual

Non-approved schemes: general definitions

Section 387 ITEPA 2003 and Sections 611 & 612(1) ICTA 1988

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

Section 611(1) ICTA 1988 defined a retirement benefits scheme as a scheme that consists of or includes relevant benefits (ICTA88 and Section 393A(1) ITEPA 2003).

Section 611 (2) defined ‘scheme’ as including a ‘deed, agreement, series of agreements or other arrangements’. It does not have to be a formal document and schemes do not have to adopt any particular form. See EIM15406 for more information.

Section 612(1) defined ‘relevant benefits’ (see EIM15403).

Note: A non-approved retirement benefits scheme automatically became an employer-financed retirement benefits scheme at 6 April 2006 as long as it met the definition of an employer-financed scheme set out in S393A ITEPA 2003 (see EIM15020).

In cases where it is claimed that the facts of the case do not constitute a non-approved or employer-financed retirement benefits scheme please refer the case to Pension Scheme Services (Technical), FitzRoy House, Castle Meadow Road, Nottingham NG2 1BD.