Section 196A | Power to restrict relief

(1)The Board of Inland Revenue may make regulations for restricting the extent to which contributions paid by an employer under a registered pension scheme in respect of an individual are subject to relief in circumstances in which subsection (2) or (3) applies (or both do).

(2)This subsection applies where any of the benefits which will or may be payable to or in respect of the individual under the registered pension scheme will be payable only if relevant benefits expected to be so paid under an employer-financed retirement benefits scheme are not so paid.

(3)This subsection applies where, because relevant benefits are or may be payable to or in respect of the individual under an employer-financed retirement benefits scheme, the aggregate of the amount of any sums and the market value of any assets—

(a)held for the purposes of, or

(b)representing accrued rights under,

the registered pension scheme which may be transferred by way of a recognised transfer in respect of the individual will or may be less than it otherwise would be.

(4)The reference in subsection (1) to contributions paid by an employer being subject to relief is to—

(a)their being deductible in computing the amount of the profits of the employer for the purposes of Part 2 of ITTOIA 2005 or Part 3 of CTA 2009 (trading income),

(b)their being expenses of management of the employer for the purposes of section 1219 of CTA 2009 (expenses of management: companies with investment business), or

(c)their being ordinary BLAGAB management expenses of the employer for an accounting period for the purposes of section 76 of FA 2012,

(depending on which is appropriate in relation to the employer).

(5)In this section—

“employer-financed retirement benefits scheme”, and

“relevant benefits”,

have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections 393A and 393B of that Act).