GLOSSARY

Deficit definition

Published by a LexisNexis Pensions expert

What does Deficit mean?

Not enough money in a pension scheme – based on certain assumptions.

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How to manage scheme funding deficits

CORONAVIRUS (COVID-19) UPDATE: The coronavirus pandemic has had a detrimental impact on the funding levels of a lot of DB schemes and on their employer covenant. The Pensions Regulator (TPR) has issued various guidance documents, including DB scheme funding and investment COVID-19 guidance for trustees and the Annual Funding Statement 2020, to help DB trustees deal with funding issues, including employer covenant changes, employer requests for funding easements (eg to reduce or suspend deficit repair contributions), completing ongoing valuations and changes to recovery plans.For further information, see Practice Note: Coronavirus (COVID-19)—the pensions implications for trustees — Funding impact for DB schemes.A pension scheme deficit exists when the scheme’s assets are less than its liabilities. There are a number of ways of measuring the deficit, eg:•on the scheme funding basis—this is required by the Occupational Pension Schemes (Scheme Funding) Regulations 2005 and is the basis upon which future contributions are calculated•on a solvency basis—liabilities are valued as the amount an insurer would require to fully insure the scheme benefits (also called the 'buy-out basis')•on the Pension Protection Fund (PPF) basis—the value of assets and liabilities are based on standard assumptions and benefit structure set out by the PPF•on an accounting basis—assets and liabilities are valued as required by an accounting standardWhere a

UK REITs—anti-avoidance

UK REITs—anti-avoidance This Practice Note examines the principal anti-avoidance provisions which apply to companies and groups of companies within the UK REIT regime. These rules amplify the anti-avoidance purpose of the conditions (and tests) for entry to, and ongoing application of, the UK REIT regime. These conditions and tests are considered in more detail in Practice Note: UK REITs—the conditions. The purpose of the anti-avoidance rules is to prevent companies and groups from obtaining a tax advantage from the use of the UK REIT regime in circumstances where it was not intended to convey the benefit sought or where the benefit sought is greater than the benefit intended to be available. This is achieved principally by: • imposing tax charges where profits would otherwise be exempt • reducing a deduction or other tax benefit (including, for instance, by reversing the effect of a change in a relevant property's chargeable gains base cost), or • in the last resort, allowing HMRC to issue a termination notice expelling a UK REIT company from the regime In practice, it is rare, if not unknown, for these rules to be applied, so that the effect of these rules serves principally as: • a deterrent, or • as a limit on the ability of companies to undertake transactions that may be viewed as involving unacceptable structuring This Practice Note considers the UK REIT regime's principal anti-avoidance rule before examining the specific

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Special administration—special administrators’ progress report

Special administration—special administrators’ progress report [investment bank name] (in special administration) [Joint] Special Administrators’ Progress Report for the six-month period [date] to [date] Notice: About this Report • This Report has been prepared by [names of special administrators], the Special Administrators of [investment bank name] (in special administration), solely to comply with their statutory duty under the Investment Bank Special Administration (England and Wales) Rules 2011, SI 2011/1301, r 122 to provide creditors and clients with an update on the progress of the special administration and for no other purpose. This Report is not suitable to be relied upon by any other person, or for any other purpose, or in any other context. • This Report has not been prepared in contemplation of it being used, and is not suitable to be used, to inform any investment decision in relation to the debt of or any financial interest in [investment bank name] (in special administration). • Any estimated outcomes for creditors and clients included in this Report are illustrative only and cannot be relied upon as guidance as to the actual outcomes for creditors, clients or other stakeholders. • Any person that chooses to rely on this Report for any purpose or in any context other than under the Investment Bank Special Administration (England and Wales) Rules 2011, SI 2011/1301, r 122 does so at its own risk. • To the fullest extent permitted

Local government outsourcing contract—template pensions schedule

Local government outsourcing contract—template pensions schedule 1 Interpretation 1.1 The following definitions and rules of interpretation apply in this Schedule: Admission Agreement • means the admission agreement to be entered into on or around the date of the [Outsourcing Contract] between the administering authority of the LGPS and the Supplier Best Value Direction • means the Best Value Authorities (Staff Transfers) Pensions Direction 2007 Broadly Comparable Pension Scheme • a pension scheme formally certified by the Government Actuary’s Department as broadly comparable to the LGPS Customer’s Scheme • the [ [LGPS] OR [other pension scheme] currently operated by the Customer in respect of the Relevant Employees] Fair Deal Guidance • HM Treasury Fair Deal for staff pensions: Staff transfer from central government (October 2013) Onward Transfer Date • the date of transfer of Onward Transferring Employees of the Supplier pursuant to TUPE 2006 on expiry (or earlier termination) of the [Outsourcing Contract] Onward Transferring Employees • the employees of the Supplier who on expiry (or earlier termination) of the [Outsourcing Contract] automatically transfer under TUPE 2006 to the Customer or another employer for the purpose of provision of the Services LGPS • the Local Government Pension Scheme as established and governed by the Superannuation Act 1972, the Public Service Pensions Act 2013, the Local Government Pension Scheme Regulations 2013, SI 2013/2356 and the related Local Government Pension Scheme Regulations Relevant Employees • means the employees who [refer to employment definitions in the Outsourcing Contract] and

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Does the ability of a discretionary trust beneficiary to reclaim tax on an income distribution from a discretionary trust depend on the balance of the tax pool?

Does the ability of a discretionary trust beneficiary to reclaim tax on an income distribution from a discretionary trust depend on the balance of the tax pool? Beneficiaries of a discretionary trust have no entitlement to income, and only receive income at the discretion of the trustees (section 493 of the Income Tax Act 2007 (ITA 2007)). Any income distributed to a beneficiary is deemed to have been paid net of a 45% tax credit. This 45% rate applies irrespective of the income actually received by the trustees. For example, if the trustees' only source of income is UK dividends on which tax is paid at 38.1%, then if that income is subsequently distributed to a beneficiary, it will always carry a 45% tax credit (ITA 2007, s 494). If a discretionary trust makes a distribution to a beneficiary, the distribution and the tax deducted from it is certified on Form R185 (ITA 2007, s 495). Therefore, when a beneficiary receives a distribution of income from a discretionary trust, it is simply certified as ‘trust income’ on Form R185 and is always treated as non-savings income in the hands of the recipient. The beneficiary will enter a net sum on their self-assessment return, and this is classed as non-savings income. Therefore, the beneficiary will not be able to use their personal savings allowance or dividend allowance in

Where there is a risk of bankruptcy, can the court make an interim order for sale in financial remedy proceedings?

Where there is a risk of bankruptcy, can the court make an interim order for sale in remedy'>financial remedy proceedings? The court has no jurisdiction to make an interim property adjustment order, per the Court of Appeal decision in Wicks v Wicks. In addition, section 24A of the Matrimonial Causes Act 1973 provides that an order for the sale of property may only be made on or after the making of an order for periodical payments, a lump sum order, a property adjustment order, or a legal services payment order and generally such orders (save for a legal services payment order) will be made at a final hearing or be contained within a final order made by consent. The courts have, since Wicks, on occasions, approached this issue using different legislative provisions, for example in BR v VT, the husband made an application for an

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Property weekly highlights—11 August 2022

This week's edition of Property weekly highlights includes: Charity Commission guidance on the Charities Act 2022, the latest on the Economic Crime (Transparency and Enforcement) Act 2022 and a case on exclusivity agreements in the context of property investment finance.

Property Disputes weekly highlights—11 August 2022

This week's edition of Property Disputes weekly highlights includes: High Court cases regarding whether the termination of a joint tenancy by notice to quit amounted to a breach of trust and a breach of an exclusivity clause leading to a loss of chance claim, an Upper Tribunal case on the valuation of business rates for museums, further borough councils joining the local land charges programme and details of housing-related offences committed by landlords.

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