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This is a Finance Act 2004 term referring to a scheme providing retirement and death benefits that was either non-approved prior to A-day or from A-day was or is a non-registered pension scheme. It is the current term for an unregistered (formerly unapproved) scheme, formerly FURBS, UURBS etc.
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Issues to consider when drafting a settlement agreement—checklist (employer) The employer (and its advisers) should consider the following issues: Preparatory steps • Obtain from the employer: ◦ a copy of the departing employee's latest contract of employment/other relevant documents containing contractual terms (NB these may be in a staff handbook) ◦ details of the contractual benefits enjoyed by the employee ◦ relevant information regarding the employee's pension benefits ◦ relevant information regarding any shares/share options, etc held by the employee? Consider the Articles of Association/any relevant shareholder agreement, share scheme documentation, etc. See also Shares and share options below Status of negotiations • Will negotiations take place between the parties directly, or between their respective legal advisers? • How strong is the employer's negotiating position? How strong are the employee's claims or potential claims? In the case of dismissal, is there a fair reason and has the employer carried out a fair procedure? Is the employer in repudiatory breach? What is the employer prepared to offer initially, and is that...
Issues to consider when reviewing a settlement agreement—checklist (employee) The employee (and their adviser) should consider the following issues: Preparatory steps • Obtain: ◦ a copy of the employee's latest contract of employment/other relevant documents containing contractual terms (NB these may be in a staff handbook) ◦ details of the contractual benefits enjoyed by the employee ◦ relevant information regarding the employee's pension benefits ◦ relevant information regarding any shares/share options etc held by the employee. Consider the Articles of Association/any relevant shareholder agreement, share scheme documentation, etc. See also Shares and share options below ◦ copies of relevant open and without prejudice correspondence between the employer and the employee • Consider the nature of the advice being given, and ensure that this is reflected in the client care letter/terms of business, ie: ◦ is the advice being given confined to advice on the terms and effect of the settlement agreement (as required to meet the relevant condition regulating settlement agreements)? ◦ is the employee also being advised on whether...
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Just as executives tend to enjoy better salary packages than the ordinary workforce, so is it often the case that they receive better pension provision from their employers. Executive retirement benefit provision can take a variety of forms, including:•special ‘executive’ sections of group-wide occupational pension schemes offering more generous benefits than the ‘main section’•executive-only (registered) occupational pension schemes•'top-up' trust-based (unregistered) pension arrangements, and•unfunded contractual pension promisesPrior to A-day (6 April 2006), when the current registered pension scheme tax regime came into force, retirement benefits for executives in excess of the then applicable benefit limits imposed under the tax approved pensions regime were commonly provided through either:•funded unapproved retirement benefit schemes (FURBS), or•unfunded unapproved retirement benefit schemes (UURBS)FURBS and UURBS each possessed some tax advantages and could be operated effectively as top-up arrangements to executives’ existing occupational pension schemes.Since A-day, FURBS and UURBS may be regarded as funded and unfunded Employer Financed Retirement Benefit Schemes (EFRBS) respectively. EFRBS are not subject to the tax regime applicable to registered pension schemes under...
Ways of accruing pension benefitsThere are a variety of possible pension arrangements for employees. The main options include:•occupational pension schemes•personal pension schemes•employer-financed retirement benefits schemes (EFRBS)•master trusts (including the National Employment Savings Trust (NEST) since October 2012)•the state pensionEmployees may be members of and contribute to more than one pension arrangement at the same time eg the employer's occupational pension scheme and the employee's own personal pension scheme.Occupational pension schemesFrom a legislative point of view, an occupational pension scheme:•is a scheme or other arrangements which provides benefits to or in respect of people:◦on retirement◦on having reached a particular age, or◦on termination of service in an employment•must have been established for the purpose of providing benefits to, or in respect of, people with service in employments of a particular description (and perhaps also for other people too)•must have been established by:◦an employer of people in employments of that description, or◦a person in an employment of that description, or◦a person representing interests which include those of such employers or persons in employmentThe...
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Does the £30,000 tax exemption for termination payments apply where a person’s office as a director is terminated, but where their employment continues? Where a compensatory payment for loss of office or employment is made in circumstances where: • the payment is not taxable as: ◦ earnings under section 62 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) (for more information, see Practice Note: Termination payments taxed as earnings) ◦ benefits-in-kind (for more information, see Practice Note: How employment income is taxed—non-cash earnings or benefits) ◦ benefits from an employer-financed retirement benefits scheme ((for more information, see: Employer-financed retirement benefits scheme: Tolley’s Income Tax 2018–19 [56.35]–[56.39]) ◦ employment-related securities (for more information, see: Employment-related securities—overview) ◦ disguised remuneration, if the payments or benefits on termination are provided by a third party (such as an employee benefit trust) rather than the employer itself (for more information, see: Disguised remuneration and EBTs—overview), or ◦ restrictive undertakings (Practice Note: Taxation of payments for restrictive covenants or undertakings),...
If an individual is an office-holder (such as a director or a company secretary) and is removed from office, could a termination payment for loss of office qualify for the £30,000 exemption? As explained in Practice Note: Termination payments qualifying for £30,000 exemption, where a compensatory payment for loss of office or employment is made in circumstances where the payment is not taxable as: • earnings under section 62 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) (for more information, see Practice Note: Termination payments taxed as earnings) • benefits-in-kind (for more information, see Practice Note: How employment income is taxed—non-cash earnings or benefits) • benefits from an employer-financed retirement benefits scheme • employment-related securities (for more information, see: Employment-related securities—overview) • disguised remuneration, if the payments or benefits on termination are provided by a third party (such as an employee benefit trust) rather than the employer itself (for more information, see: Disguised remuneration and EBTs—overview), or • restrictive undertakings (see Practice Note: Taxation...
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This week’s edition of Tax highlights includes: (1) the Court of Justice’s decision in Kaplan International Colleges UK Ltd that a supply by a cost-sharing group (CSG) to a VAT group falls outside the exemption where a member of a VAT group is not a member of the CSG, (2) the FTT’s decision in Project Blue that consideration was contingent for SDLT purposes, estoppel and precedent, (3) the decision of the FTT in White Collar Financial Ltd granting HMRC’s application for an order that arrangements were notifiable under the DOTAS rules and that the company (WCF Ltd) was the promoter of them, and (4) the Supreme Court’s confirmation in Test Claimants in FII Group Litigation that section 32(1)(c) of the Limitation Act 1980 applies to claims for the restitution of money paid under a mistake of law.
This week's edition of Private Client weekly highlights includes: (1) Consideration of the commorientes rule in Re Estate of John William Scarle, deceased; (2) Conditional and incomplete gifts in Collins v Simonsen; (3) A settlement agreement on termination of employment being taxed as an EFRBS in The executors of Ian John Clark (deceased) v HMRC; (4) Analysis of the draft regulations to implement DAC6; (5) The Privy Council’s decision on unlawful preferences in the Weavering hedge fund case; (6) Hyman v HMRC, the first decision for SDLT purposes on whether a property was wholly residential or mixed use, and what constituted the ‘grounds’ of the main house, and (7) Taylor v Van Dutch Marine Holding Ltd on whether subsequent proceedings against an undisclosed principal are permitted.
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