Yes. If your pension scheme was created or approved before 20 March 2007, your pension entitlements and your entitlement to pensions may be altered to ensure that your old pension scheme is no longer adequate.
Your pension scheme may become ‘extended’. It can be for a period up to 30 years. Find out more at ‘Extending your pension scheme’.
Do you need to pay income tax on dividends from newly-created pension schemes?
Yes. You may still need to pay income tax if a pension scheme has been created. The rules are different if the scheme was approved before 20 March 2007 but it may still be necessary to pay income tax because the scheme is still being administered.
When there is a change in your pension entitlement, the new entitlement will be recorded on your declaration of income tax liabilities within the Income tax Return for the tax year to which the scheme relates.
For further information go to:
What do I do if my pension scheme becomes extended?
If your pension scheme became extended and was not approved before 20 March 2007, you may have your entitlement amended. To find out how to do this, have a look at ‘Extending your pension scheme’ in Chapter 4 of this guide.
If you were a non-pensionable pensioner (or pension scheme employee) on a pension income until after the pension scheme was extended, you will be automatically reclassified. This is where you have ‘expired benefits and liabilities’ (that is, the amount is greater than the original entitlement) and you need to be reassessed and you will be considered as an extension-able pensioner for the tax year for which you had your original pension entitlement (that is, for the tax year before you became ‘extended’).
If a pension scheme was extended before 20 March 2007, the existing entitlement must be reassessed. This means that you will be reassessed.
See ‘Changing your pension entitlement to extend’, in Chapter 4 of this guide.
What is an ‘extended’ pension scheme?
An ‘extended pension scheme’ is a pension scheme that was made available for the first tax year after the date of its creation and was extended by 2 months.
Extended pension schemes are typically granted for years beyond the tax year that was at the time of creation. The extension may continue for years after the period for which it was extended.
Extended pension schemes may be given to a new employer/employee
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