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HMRC internal manual

Trusts, Settlements and Estates Manual

Trusts for particular purposes: employment-related trusts: retirement benefits: ICTA88/S615 schemes - rules

If a scheme is accepted by the Board as satisfying the conditions of ICTA88/S615 (6) then:

  1. under ICTA88/S614 (5), the income of certain superannuation and provident funds set up for the benefit of overseas employees is exempt to the same extent as if it were the income of a person not domiciled, ordinarily resident or resident in the United Kingdom


  1. under ICTA88/S615 (3), annuities payable from such funds to persons not resident in the United Kingdom are to be paid without deduction of Income Tax


  1. under TCGA92/S271(1)(c), such funds are exempt from Capital Gains Tax


  1. under ITEPA2003/S414A Income Tax is not charged on lump sum relevant benefits receivable from such funds by an employee, their personal representatives, or any dependant (before 5 February 2014 this was under ESC A10)


  1.  the deductibility of employers’ contributions up to 5 April 2017 is considered under the general principles applying to such expenses.

Income of such funds that arises in the United Kingdom, including untaxed interest (other than interest on securities in respect of which exemption is allowed under ICTA88/S614) is assessable in the normal way. Extra-statutory concession ESC/B13 will not apply since the trustees will be resident in the United Kingdom.

National Insurance contributions (NICs) position from 6 April 2006

From 6 April 2006

  • an employer’s payment to a superannuation fund to which section 615(3) applies and
  • a payment by way of a pension or annuity from such a fund

are disregarded in the calculation of earnings for Class 1 NICs purposes.

From 16 November 2006, the disregard in the second bullet was extended to include a payment by way of a pension from such a fund from which income tax is not deducted. Guidance is from NIM02740 .