Employer debt regulations meaning

In this issue: Companies and corporation tax VAT Funds Employment taxes Taxes management and litigation Stamp and transfer taxes LexTalk®Tax: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Companies and corporation tax UT confirms FTT finding that distributions from a non-UK company were not of a capital nature (Alexander Beard v HMRC) As noted in last week’s Tax weekly highlights, in Alexander Beard [2024] UKUT 73 (TCC) the Upper Tribunal (UT) affirmed the First-tier Tax Tribunal’s (FTT) decision that the amounts received by the taxpayer were (i) dividends for UK tax purposes, yet (ii) not dividends of a capital nature for the purposes of section 402 of the Income Tax (Trading and Other Income) Act 2005. See News Analysis: UT upholds FTT decision that distributions from a non-UK company were not dividends of a capital nature (Alexander Beard v HMRC)...

A risk with employment cessation events is that they can be set off unintentionally, for example because the last remaining active member of an employer in a multi-employer defined benefit scheme has left. The Employer Debt Regulations, SI 2005/678 were amended with effect from 6 April 2008 to introduce grace periods, a device intended to help employers deal with accidental employment cessation events. For further information on employment cessation events and other section 75 triggers, see Practice Note: When is a section 75 debt triggered? When can a grace period be used? When can a grace period be used? An employer in a multi-employer defined benefit scheme may notify the trustees that it wishes to enter a grace period (by giving a grace period notice) if: that employer ceases to employ active members at a time when at least one other employer still employs active members, thereby creating an employment cessation event, and it intends to employ at least one individual who is an...

This practice note applies to defined benefit occupational pension schemes The importance of identifying a scheme’s statutory employer(s) A fundamental element of the law governing occupational pension schemes, particularly defined benefit (DB) schemes, is that the main burden of supporting the scheme lies with its sponsoring employers, as a matter of law alone indeed. An employer might have exited the scheme previously without settling all liabilities owed to it; in such circumstances they may still be a ‘statutory employer’ even though they no longer participate. They may therefore continue to bear obligations in relation to the scheme. Under the registered pension scheme regime, various specific obligations fall upon those who qualify as ‘statutory employers’, a notion carried over from the earlier tax-exempt approval regime in force before A-day (for further information on the pre A-day regime, see The pre A-day pensions tax regime [Archived]). These duties will typically extend beyond those that a participating employer assumes under the scheme’s trust deed and rules. For...

THIS PRACTICE NOTE APPLIES TO MULTI‑EMPLOYER DEFINED BENEFIT OCCUPATIONAL PENSION SCHEMES This Practice Note examines relevant transfer deductions—covering the statutory framework, the method of calculation and potential practical challenges. It addresses their legislative basis, approaches to calculation and the kinds of practical difficulties that may arise. When can a relevant transfer deduction apply? Such deductions arise where a statutory debt (the section 75 debt) is triggered in relation to a participating employer in a multi‑employer pension scheme under the Pensions Act 1995, ss 75–75A, and the Occupational Pension Schemes (Employer Debt) Regulations 2005, SI 2005/678 (the Employer Debt Legislation). This occurs, for example, on an employment‑cessation event—namely, where one participating employer stops employing active members while another participating employer continues to employ at least one active member. Put plainly, absent a section 75 trigger under the Employer Debt Legislation, a relevant transfer deduction cannot apply. The section 75 debt due from the participating employer in a multi‑employer scheme (described in this Practice Note as the departing employer)...

This Deed is entered into on the [ insert day ] day of [ insert month ] 20[ insert year ] Parties [ Insert full company name ], incorporated in England and Wales with company number [ insert number ], and whose registered office is at [ insert registered company address ] (the Departing Employer); [ Insert full company name ], incorporated in England and Wales with company number [ insert number ], and whose registered office is at [ insert registered company address ] (the Receiving Employer); and [ [ Insert full name of company ] incorporated in England and Wales with company number [ insert number ] and having its registered office at [ insert registered company address ] OR [ insert individual name(s) ] of [ insert individual address(es) ] ] (the Trustees). Background: (A) [ insert full name of scheme ] (the Scheme) was constituted by an [ interim OR definitive ] deed dated [ insert...

This Deed is entered into on the [ insert day ] day of [ insert month ] 20 [ insert year ], by and between the parties set out below, namely: Parties [ insert full company name ], registered in England and Wales with company number [ insert number ], and having its registered office situated at [ insert registered company address ] (the Receiving Employer); [ insert full company name ], registered in England and Wales with company number [ insert number ], and having its registered office situated at [ insert registered company address ] (the Principal Employer); [ insert full name of company ], registered in England and Wales with company number [ insert number ], and having its registered office situated at [ insert registered company address ] OR [ insert individual name(s) ] of [ insert individual address(es) ] (the 'Trustees'). Background: (A) [ Insert full name of scheme ] (the Scheme) was constituted by...