12 July 2006
Legislative timetable to implement new pension scheme eligibility rules from April 2007
As announced on 23 March, the Government intends to create a new FSA-regulated activity related to personal pension schemes from 6 April 2007. This will form the basis of widened eligibility rules for those wishing to establish registered pension schemes within the simplified tax regime.
On 12th July the Economic Secretary Ed Balls announced the legislative timetable to implement these changes. The changes will be made in two stages.
First, the Financial Services and Markets Act 2000 (‘FSMA’) Regulated Activities Order 2001 (‘RAO’) will be amended to create a new regulated activity of “establishing, operating or winding up” a personal pension scheme from April 2007. The amending Order has today been put before Parliament.
Secondly, the Finance Act 2004 will be amended so that any person with permission to carry out this new activity (or the similar activity related to stakeholder pension schemes) will be eligible to establish a registered (tax-privileged) pension scheme.
It has recently come to light that a consequential amendment will be necessary to the definition of “personal pension scheme” in the Pension Schemes Act 1993, so that it correctly cross refers to the amended tax legislation. This amendment can only be made by primary legislation.
The Government therefore proposes to amend both the Finance Act 2004 and the Pension Schemes Act 1993 in Finance Bill 2007. These amendments will have effect from 6 April 2007, to coincide with the introduction of the new regulated activity.
A draft Finance Bill 2007 clause, and Explanatory Note have today been published on both HMT and HMRC websites.