Income Tax (Earnings and Pensions) Act 2003 section 554Z19

Provision of security

Section 554Z19 deals with what happens when a person (B) provides security — in any form, however informal — to back up an undertaking related to retirement benefits or similar arrangements provided through third parties, and how the value of that security is determined for income tax purposes.

• A relevant step occurs when B provides security, in any manner and however informally, for the performance of the relevant undertaking — but not where B is acting as a trustee
• The value of the step is based on the money and assets that are the subject of the security at the time the step is taken
• Where the security also covers other undertakings beyond the relevant one, the money and assets must be apportioned between them on a just and reasonable basis
• Certain exclusions that might otherwise disapply the disguised remuneration rules (under sections 554Q and 554R) do not apply where the relevant step in question would be a provision-of-security step taken by B under this section