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HMRC internal manual

Savings and Investment Manual

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HM Revenue & Customs
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Collective investment schemes: unauthorised unit trusts: pension funds pooling schemes: tax definition

Pension funds pooling scheme: regulations

The characteristics of a pension funds pooling scheme (PFPS) are set out in Regulation 4(3) of the Income Tax (Pension Funds Pooling Schemes) Regulations 1996 (SI1996/1585).

  • Each participant in the PFPS is a registered pension scheme within the meaning of FA04/S150(2) that is also an occupational pension scheme within the meaning of FA04/S150(5), a superannuation fund within the meaning of ICTA88/S615 (6) or an overseas scheme that is an occupational pension scheme within the meaning of section FA04/S150(5) and which is also within the meaning of an overseas pension scheme within the meaning of FA04/S150(7).
  • Each participant has been approved by the Board as eligible to participate in the scheme (and that approval has not been revoked or withdrawn).
  • All the participants are jointly absolutely entitled as against the trustee within the meaning of TCGA92/S60.
  • The scheme property must consist of land (including building or structures on land), shares, stock or other investments that are the subject of transactions falling within TIOPA10/SCH6/PARA17and investments comprising futures or options contracts relating to land.
  • The contributions of the participants are expended on

    • the acquisition of, or of rights in or over, land, or the management or development of that land,
    • the acquisition or construction of, or the purchase of interests in, buildings or structures on land, or the management or development of those buildings or structures,
    • the provision of machinery or plant, which is an integral part of those buildings or structures, or the management, alteration or improvement of that machinery, or plant,
    • the making of any investments in shares, stock or other investments falling within TIOPA10/SCH6/PARA17 or investments comprising futures or options contracts relating to land.
  • Where expenditure is incurred in respect of which capital allowances are, or may be, made the terms of the scheme must secure that Regulations 5 and 6 relating to expenditure qualifying for capital allowances are satisfied.
  • The terms of the scheme secure that no participant has rights or interests in any part of the scheme property that are different in nature from the rights or interests which any other participant has in that part of the scheme property.
  • The terms of the scheme secure that, in relation to any arrangements which are entered into on or after the date of the coming into force of the Regulations

    • a participant is obliged to give to the trustee of the scheme, the notification specified in Regulation 8 (a notification of non-eligibility to participate);
    • the trustee of the scheme is irrevocably authorised and obliged to undertake on behalf of the participants the responsibilities in Regulation 10 (negotiations and agreements with HMRC on behalf of participants in the scheme concerning their share of scheme income etc. and the issue of certificates of income etc. to participants) and the duties in Regulations 9 and 11 relating to participants ceasing to be eligible investors and the annual provision of information to HMRC;.
    • the trustee of the scheme has given notice to the Commissioners for HMRC electing for the scheme to be treated as a pension funds pooling scheme within the meaning of the Regulations (Capital Gains Tax - SI1996/1583, Income Tax - SI1996/1585) and not as a unit trust scheme.