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| Alternatively secured pension means payment of pension direct from a SIPP or SSAS to a member or a dependant of the member (who is aged 75 or over).
Annual allowance is the limit on tax relievable contributions and increases to pension rights under defined benefit pension schemes (together known as pension input) that can be made by or for an individual via registered pension schemes without the individual incurring a tax charge. If total pension input to an individual’s registered pension schemes in all pension input periods ending in a tax year exceeds the annual allowance for that tax year then the individual will be liable to a tax charge of 40% of the excess. The annual allowance for the tax year 2009/10 is £245,000 and for the tax years 2010/11 – 2015/16 it will be £255,000. Associated employer (in relation to a SSAS) means a company which is associated with a sponsoring employer (e.g. it is controlled either by a sponsoring employer or by the same person or persons who control a sponsoring employer) but is not itself a sponsoring employer. Authorised payments are payments specifically authorised under the pension tax legislation (e.g. pension commencement lump sum, unsecured pension, alternatively secured pension, authorised employer loans). Beneficiary means any person to whom the SIPP or SSAS trustees pay a lump sum death benefit. Charity means a body of persons or trust established for charitable purposes only. Contribution Credit is that part of a SSAS fund attributable to a member and is calculated in accordance with a set formula contained in the SSAS rules. Crystallise means to designate all or part of a member’s funds held in a SIPP or SSAS for the provision of benefits before age 75. Dependant of a member means:
Enhanced protection means that (where you have a valid Certificate of Enhanced Protection from HMRC) whatever the value of a member’s benefits at the time they are crystallised, they are not subject to the Lifetime Allowance, provided that since 5 April 2006, no contributions or pension input (in relation to defined benefit schemes) have been made for the member to a SSAS or SIPP or any other registered pension scheme of which the member is or has been a member. Investment grade gold is defined by HMRC as gold of a purity not less than 995 thousandths that is in the form of a bar or wafer, of a weight accepted by the bullion markets. Lifetime Allowance is the upper limit on tax favoured pension savings that an individual can build up in aggregate in all of his/her registered pension schemes. The lifetime allowance for the tax year 2009/10 is £1,750,000 and for the tax years 2010/11 – 2015/16 will be £1,800,000. Market value is defined in Section 272 of The Taxation of Chargeable Gains Act 1992 (TCGA 1992) and means the price which an asset would reasonably be expected to fetch on a sale in the open market, except in the case of securities listed on the Stock Exchange Daily Official List (SEDOL). Market value for securities listed on SEDOL is defined in Section 272(3) of TCGA 1992 and is often referred to by stockbrokers and investment managers as the 'quarter-up basis'. Member means an individual who has been admitted to membership of a SIPP or SSAS. Pension commencement lump sum means a tax-free lump sum benefit paid to a member of a registered pension scheme (who is aged under 75) in connection with an arising entitlement to a pension benefit (other than a short-term annuity). Pension input / Pension input period are best explained by way of examples. A separate technical note available on request from EBS contains some examples. Principal sponsoring employer means the sponsoring employer which establishes a SSAS or replaces the original principal sponsoring employer as the principal sponsoring employer at any time. Qualifying recognised overseas pension scheme (QROPS) means a recognised overseas pension scheme for which the scheme manager has signed an undertaking to inform HMRC if the scheme ceases to be a recognised overseas pension scheme and comply with any prescribed information requirements imposed on the scheme manager by HMRC. Scheme administrator means the person(s) appointed in accordance with the SIPP or SSAS rules to be responsible for the discharge of the functions conferred or imposed on the scheme administrator by HMRC. Scheme pension is a pension entitlement provided to a member of a SSAS or a deceased SSAS member’s dependant, the entitlement to which is an absolute entitlement to a lifetime pension under the SSAS that cannot be reduced year on year (except in narrowly defined circumstances) and meets the conditions laid down in paragraph 2 of Schedule 28 to Finance Act 2004. Short-term annuity means an annuity contract purchased from a member's unsecured pension fund that provides that member with an unsecured pension for a term of no more than five years (not reaching to or beyond their 75th birthday). Sponsoring employer includes an employer, which adheres to the SSAS trust deed and rules as a participating employer (whether or not it pays contributions to the SSAS for members who are its employees). It also includes an employer, which the SSAS trustees allow to pay contributions to the SSAS for one or more members who are employees or ex-employees of that employer, even though that employer does not adhere to the SSAS trust deed and rules as a participating employer. Taxable property means residential property and tangible moveable property unless specifically exempted under HMRC legislation. Trustee is a person who has been given responsibility for administering the SIPP or SSAS in accordance with the governing trust deed, rules and relevant legislation. Unauthorised payments are payments which are not authorised payments (e.g. payment of unsecured pension in excess of the maximum authorised, payment of lump sum benefits on the death of a SSAS member whilst in receipt of alternatively secured pension, an unsecured loan to a sponsoring employer, and non arm’s length transactions with connected parties). Unsecured pension means payment of a pension direct from the SIPP SSAS or from a short-term annuity to the member or a dependant (who is aged under 75). |
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