PTM033300 - Registration: de-registration: consequences of de-registration

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Information to be provided to HMRC
The de-registration charge
Subsequent tax treatment of a de-registered pension scheme

Information to be provided to HMRC

Regulation 15(2) The Registered Pension Schemes (Relief at Source) Regulations 2005 - SI 2005/3448

The scheme administrator of a scheme that has operated relief at source (RAS) must automatically provide certain information to HMRC following de-registration.

Within 30 days of the notice to de-register the scheme the scheme administrator must provide the following information to HMRC in respect of every member who has paid contributions under RAS after the scheme has been de-registered:

  • full name,
  • address
  • National Insurance number, and
  • the amount of relief obtained by means of the relevant contributions.

The de-registration charge

Section 242 Finance Act 2004

De-registration of a scheme triggers liability to the de-registration charge.

The amount of the de-registration charge is 40% of the total of the amount of:

  • sums (cash) and
  • the market value of any assets

held for the purposes of the scheme immediately before it ceased to be a registered pension scheme.

The person liable to pay the tax charge is the scheme administrator in place immediately before the scheme ceased to be registered. If the scheme administrator is made up of more than one person, for example two individuals, liability to the tax charge is joint and several on all persons making up the scheme administrator. This means that each and any of the persons making up the scheme administrator can be asked to pay the whole amount of tax due.

If there is no scheme administrator, liability passes to other persons as described at PTM155000.

The de-registration charge should be reported and paid using the Accounting for Tax return – see PTM162000.

The charge is a free-standing tax charge, which means any losses that a taxpayer may have cannot be set against the tax charge. Liability to the tax charge arises whether or not the liable person(s) are UK resident.

Subsequent tax treatment of a de-registered pension scheme

A pension scheme which has ceased to be a registered pension scheme no longer qualifies for the tax reliefs described at PTM024000.

Those running the pension scheme will decide whether the scheme should continue as a non-registered pension scheme or be wound up. If it continues, and it is an occupational pension scheme, it is likely to be treated for tax purposes as an employer-financed retirement benefit scheme, from the date of de-registration.

More guidance about employer-financed retirement benefit schemes can be found in the Employment Income Manual (EIM) from page EIM15000 onwards.

Any life assurance business of a company which was entered into for the purposes of a registered pension scheme ceases to be pension business at the beginning of the company’s period of account in which the pension scheme ceases to be a registered pension scheme. Treating the business as non-pension business throughout the whole period of account avoids complication when calculating the figures for the company’s regulatory return.