Income Tax Citation, commencement and application 1 1 These Regulations may be cited as the Employment Income Provided Through Third Parties (Excluded Relevant Steps) Regulations 2011 and come into force on 6th December 2011. 2 The Regulations have effect in relation to relevant steps taken on and after 9th December 2010. Interpretation 2 In these Regulations— “Part 7A” means Part 7A of the Income Tax (Earnings and Pensions) Act 2003 (employment income provided through third parties); and “relevant non-UK scheme” means a scheme within paragraph 1(5) of Schedule 34 to FA 2004 . Disapplication of Chapter 2 of Part 7A: relevant steps arising or deriving from UK tax-relieved funds and relevant transfer funds 3 1 Chapter 2 of Part 7A (treatment of relevant steps for income tax purposes) does not apply by reason of a relevant step if the subject of the relevant step is a sum of money or asset which represents or which has (wholly or partly) arisen or derived (directly or indirectly) from a sum of money or assets which represents or has represented— a a UK tax-relieved fund under a relevant non-UK scheme, or b a relevant transfer fund under a relevant non-UK scheme. 2 Paragraph (3) applies if the sum of money or asset which is the subject of the relevant step only partly— a represents, or b arises or derives from a sum of money or assets which represents or has represented, a fund mentioned in paragraph (1). 3 The relevant step is to be treated for the purposes of this Part as being two separate relevant steps— a one in relation to the sum of money or asset so far as it represents or arises or derives from a sum of money or assets which represents or has represented a fund mentioned in paragraph (1), and b one in relation to the sum of money or asset so far as it does not represent or arise or derive from a sum of money or assets which represents or has represented a fund mentioned in paragraph (1), and paragraph (1) applies only in relation to the separate relevant step mentioned in sub-paragraph (a). 4 In order to give effect to paragraph (3), the sum of money or asset which is the subject of the relevant step is to be apportioned between the two separate relevant steps on a just and reasonable basis. 5 In paragraph (1)— “relevant transfer fund” has the meaning given in paragraph 4(2) of Schedule 34 to FA 2004; “UK tax-relieved fund” has the meaning given in paragraph 3(2) of Schedule 34 to FA 2004. Disapplication of Chapter 2 of Part 7A: relevant steps arising or deriving from a payment from a registered pension scheme that has been subject to the unauthorised payments charge 4 1 Chapter 2 of Part 7A does not apply by reason of a relevant step if the subject of the relevant step is a sum of money or asset which has (wholly or partly) arisen or derived (directly or indirectly) from a payment— a made by a registered pension scheme, b that was subject to the unauthorised payments charge. 2 Paragraph (3) applies if the sum of money or asset which is the subject of the relevant step only partly arises or derives from a payment mentioned in paragraph (1). 3 The relevant step is to be treated for the purposes of Part 7A as being two separate relevant steps— a one in relation to the sum of money or asset so far as it arises or derives from a payment mentioned in paragraph (1), and b one in relation to the sum of money or asset so far as it does not arise or derive from a payment mentioned in paragraph (1), and paragraph (1) applies only in relation to the separate relevant step mentioned in sub-paragraph (a). 4 In order to give effect to paragraph (3), the sum of money or asset which is the subject of the relevant step is to be apportioned between the two separate relevant steps on a just and reasonable basis. 5 In this regulation, “the unauthorised payments charge” means the charge under section 208 of FA 2004. Modification of section 554S in Part 7A 5 For the purposes of applying these Regulations, section 554S(2) in Part 7A applies as if after the reference to section 554W (and before the reference to section 554X) there were a reference to these Regulations. Dave Hartnett Steve Lamey Two of the Commissioners for Her Majesty’s Revenue and Customs 9th November 2011