Section 554V | Exclusions: purchases of annuities out of pension scheme rights ^F1

(1)This section applies if—^F1

(a)an annuity contract is purchased from an insurance company wholly out of rights which A has under a pension scheme, and^F1

(b)A's rights out of which the annuity contract is purchased are, wholly or partly, pre-6 April 2011 annuity rights.^F1

(2)If the purchaser—^F1

(a)takes a relevant step for the sole purpose of purchasing the annuity contract or transferring the beneficiary's rights under the annuity contract to A or a person linked with A, or^F1

(b)on the purchase of the annuity contract, otherwise takes a relevant step within section 554B the subject of which is the beneficiary's rights under the annuity contract,^F1

Chapter 2 does not apply by reason of the relevant step.

(3)If the insurance company—^F1

(a)takes a relevant step for the sole purpose of selling the annuity contract, or^F1

(b)on the sale of the annuity contract, otherwise takes a relevant step within section 554B the subject of which is a sum of money or asset representing the purchase price received for the annuity contract,^F1

Chapter 2 does not apply by reason of the relevant step.

(4)If A's rights out of which the annuity contract is purchased are only partly pre-6 April 2011 annuity rights, any relevant step mentioned in subsection (2)(a) or (b) or (3)(a) or (b) is to be treated for the purposes of this Part as being two separate relevant steps—^F1

(a)one in relation to the annuity contract so far as it is purchased out of rights which are pre-6 April 2011 annuity rights, and^F1

(b)one in relation to the annuity contract so far as it is purchased out of rights which are not pre-6 April 2011 annuity rights,^F1

with subsection (2) or (3) (as the case may be) applying only in relation to the separate relevant step mentioned in paragraph (a) of this subsection.

(5)In order to give effect to subsection (4), the sum of money or asset which is the subject of the relevant step mentioned in subsection (2)(a) or (b) or (3)(a) or (b) is to be apportioned between the two separate relevant steps on a just and reasonable basis.^F1

(6)In this section—^F1

“annuity contract” means a contract for the provision of an annuity—although for this purpose it does not matter that the annuity may in some circumstances end before or after the life,

(a)granted for consideration in money or money's worth in the ordinary course of a business of granting annuities on human life, and

(b)payable for a term ending at a time ascertainable only by reference to the end of a human life,

“insurance company” means—

(a)a person or EEA firm within section 275(1)(a) or (b) of FA 2004, or

(b)a person resident in a territory outside the European Economic Area—

(i)whose normal business includes the provision of annuities, and

(ii)who is regulated in the conduct of that business by the government of that territory or by a body established under the law of that territory for the purpose of regulating such business, and

“pre-6 April 2011 annuity rights” means rights, which accrued before 6 April 2011, specifically to receive an annuity.