Income Tax (Earnings and Pensions) Act 2003 section 554Z17

Employer etc. to be treated as relevant third person etc.

Section 554Z17 sets out how the employer or connected party (referred to as "B") is treated as a relevant third person when they take certain steps relating to earmarking assets or providing security in connection with retirement benefit undertakings, and how the disguised remuneration rules in Chapters 1 and 2 of Part 7A apply in modified form to those steps.

• When the employer (B) earmarks assets or provides security for retirement benefit undertakings under sections 554Z18 or 554Z19, B is treated as a "relevant third person" and the action is treated as a "relevant step" for the purposes of the disguised remuneration rules, even if it would not normally qualify as one.
• Many of the usual exclusions from the disguised remuneration rules are switched off for these steps — most of the exemptions in sections 554F to 554O, 554S to 554U, 554W and 554X do not apply, and certain relief provisions in sections 554Q, 554R and 554Z7 to 554Z12 are also disapplied.
• Where B is a company within a group, references to B extend to any other company in the same group; similarly, where B is a limited liability partnership, references to B include any wholly-owned subsidiary of B — but B acting as a trustee is excluded from these provisions.
• HMRC has the power under section 554Y to make regulations covering cases where these modified rules apply, and further modifications can be found in sections 554Z18 to 554Z21.