The Registered Pension Schemes (Authorised Member Payments) Regulations, SI 2023/1012 deal with the effects of write-down orders on insurance policy holders, including those holding a pensions annuity. Where a court issues a write-down order allowing an insurance company to reduce its liabilities to policyholders to enable it to avoid insolvency, top-up payments to policy holders can be made out of the Financial Services Compensation Scheme – the aim being to ensure the value of the policy is not reduced as a result of the write-down.
The Regulations avoid unintended tax consequences for policy holders including making sure that top-up payments are not treated as unauthorised payments and are treated as pension income for the purposes of ITEPA 2003. These Regulations come into force on 31 October 2023.
The Registered Pension Schemes (Authorised Member Payments) Regulations, SI 2023/1012 deal with the effects of write-down orders on insurance policy holders, including those holding a pensions annuity. Where a court issues a write-down order allowing an insurance company to reduce its liabilities to policyholders to enable it to avoid insolvency, top-up payments to policy holders can be made out of the Financial Services Compensation Scheme – the aim being to ensure the value of the policy is not reduced as a result of the write-down.
The Regulations avoid unintended tax consequences for policy holders including making sure that top-up payments are not treated as unauthorised payments and are treated as pension income for the purposes of ITEPA 2003. These Regulations come into force on 31 October 2023.
