TSEM5220 - Trusts for particular purposes: employment related trusts - retirement benefits schemes and registered pension schemes

Registered pension schemes


Trust Registration Service

A trust holding sums or assets of a pension scheme which is a registered pension scheme for the purpose of Part 4 of the Finance Act 2004 is excluded from notifying to HMRC on the Trust Registration Service (TSEM1402) as a registrable express trust. Find more information on the registered pension scheme exclusion at TRSM23070.

However, the trustee(s)of a trust holding sums or assets of a registerable pension scheme are nonetheless required to notify the trust using the Trust Registration Service where the trustee(s) become liable to UK taxation. This is where the scheme is set up as an express trust and:

  • it is a UK trust, or is a non-UK trust with UK source of income or UK assets; and
  • from 2016/17 onwards, the trustees have incurred a liability to UK tax in relation to the income or assets of the trust. Thant includes a liability to Stamp Duty Land Tax or Stamp Duty Reserve Tax incurred when purchasing trust assets.

Registered pension scheme trusts will not need to register in this way if the scheme administrator has to pay UK income tax solely because they are liable for certain pension scheme tax charges or PAYE on benefits as explained at TRSM26020.

Self Assessment tax returns

HMRC Trusts do not need to manage the tax returns process. Pension Scheme Services will issue any Registered Pension Schemes Self Assessment tax returns that are required. Business tax-Pension scheme administration.

The returns instructions can be found in the SA Manual at `Returns/returnv issue/pension scheme returns`. SAM120080

Guidance on what is a Registered Pension Scheme is within the Pension Tax Manual.

Registered pension scheme has been deregistered

All cases are proper to HMRC BT&C Trusts.

Where all or part of the scheme relates to employment, the pension scheme is treated as an employer-financed benefit scheme, as below.

Employer-financed retirement benefits schemes

Sections 393-399, 569, 574A and Part7A ITEPA 2003

Employer-financed retirement benefits scheme (EFRBS) trustees are required to notify HMRC of their UK express trusts and some non-UK express trusts using the Trust Registration Service were

  • from 2016/17 they are a registerable taxable trust or
  • from 6 October 2020 they are a registerable express trust.

Certain trusts holding life insurance policies are excluded from registration. TRSM23030.

EFRBS trusts are taxable at the special rates for trusts ITA/S479.

EFRBS income tax provisions for employers and employees and other reporting requirements are explained in the Employment Income Manual. This could include an employer`s scheme to provide pensions and lump sums on retirement, or a more informal relevant benefits arrangement such as a lump sum death benefit into trust for relatives of a deceased employee or former employee.

EFRBS payments.

The relevant employers HMRC office considers what relief is due to the employer for contributions, see Business Income Manual. In general, the employer`s relief matches the employee`s income tax charge as to both time and amount. Further advice can be obtained from CT&VAT (Trading and Property Income Team).

Pensions that the trustees pay are chargeable as the recipient`s pension income. Guidance on pension income is from EIM75000.Certain `relevant lump sums` are also chargeable as pension income.

Other lump sum benefits or earmarking by the EFRBS may be relevant steps for Part7A ITEPA2003 disguised remuneration rules, see from EIM45000. Fall back charges, usually for older schemes, are under S394 ITEPA 2003.

National Insurance Contributions

Guidance on contributions and payments for Class 1 NICs is from NIM02750.