Section 173 | Benefits

(1)A registered pension scheme is to be treated as having made an unauthorised payment to a person who is or has been a member of the pension scheme if an asset held for the purposes of the pension scheme is used to provide a benefit (other than a payment) to—

(a)the person, or

(b)a member of the person's family or household.

(2)If the benefit is received by reason of an employment which is not lower-paid employment as a minister of religion, subsection (1) does not apply.

(3)If the benefit is received by reason of an employment which is lower-paid employment as a minister of religion, subsection (1) only applies if—

(a)it is a benefit to which Chapter 6 or 10 of the benefits code (cars and vans, and benefits not dealt with elsewhere in benefits code) would apply if the employment were not lower-paid employment as a minister of religion,

(b)the pension scheme is an occupational pension scheme, and

(c)the person, or a member of the person's family or household, is a director of, and has a material interest in, a sponsoring employer.

(4)A registered pension scheme is to be treated as having made an unauthorised payment in respect of a person who is or has been a member of the pension scheme if, after the person's death, an asset held for the purposes of the pension scheme is used to provide a benefit (other than a payment) to a person who, at the date of the person's death, was a member of the person's family or household.

(5)The person who receives the benefit is to be treated as having received the unauthorised payment.

(6)If the benefit is received by reason of an employment which is not lower-paid employment as a minister of religion, subsections (4) and (5) do not apply.

(7)If the benefit is received by reason of an employment which is lower-paid employment as a minister of religion, subsections (4) and (5) only apply if—

(a)paragraphs (a) and (b) of subsection (3) apply, and

(b)at the date of the person's death the person, or a member of the person's family or household, was a director of, and had a material interest in, a sponsoring employer.

(7A)This section does not apply if—

(a)the pension scheme is an investment-regulated pension scheme, and

(b)the asset consists of taxable property.

(8)The amount of an unauthorised payment treated as having been made by this section—

(a)in relation to such benefits, and in such circumstances, as may be prescribed by regulations made by the Board of Inland Revenue, is an amount determined in accordance with the regulations, and

(b)otherwise, is the amount which would be the cash equivalent of the benefit under the benefits code if the benefit were received by reason of an employment and the benefits code applied to it.

(9)For the purposes of subsection (8)—

(a)references in the benefits code to the employee are to be treated as references to the person who is or has been a member, and

(b)references in the benefits code to the employer are to be treated as references to the pension scheme.

(10)In this section—

(11)Section 721 of ITEPA 2003 applies for the purposes of determining the members of a person’s family or household.