Income Tax (Earnings and Pensions) Act 2003 section 554Z16

Application etc.

Section 554Z16 sets out when Chapter 3 applies, by defining the conditions that make a commitment to pay a contribution into a non-registered pension arrangement a "relevant undertaking" subject to the disguised remuneration rules.

• Chapter 3 is triggered when there is an undertaking to pay a contribution to an arrangement that is not a registered pension scheme, where relevant benefits will be provided out of that contribution by a relevant third person
• The provision of those benefits must constitute a "relevant step" under the disguised remuneration rules, and the contribution must not qualify as either a tax-relieved contribution or tax-exempt provision
• The term "undertaking" is deliberately broad — it includes commitments that are not legally enforceable and those that depend on conditions being met, even if those conditions might never be satisfied
• Key definitions such as "relevant benefits", "relevant third person", "tax-relieved contribution" and "tax-exempt provision" are drawn from other parts of the legislation, including Chapter 2 of Part 6 and Schedule 34 to Finance Act 2004