Commentary on Sections Structure of Chapters Overview Section 627: Exceptions for certain types of income
2408.This section provides that section 624 does not apply to certain income between former parties to a marriage and to commercial and charitable payments and pension contributions. It is based on section 660A of ICTA.
2409.Subsection (1) enables a person to make a settlement that benefits a former or separated spouse without that income being treated as income of the settlor.
2410.Subsection (3)(c) refers to regulations made under the Welfare Reform and Pensions Act 1999 and its equivalent in Northern Ireland although section 660A(11)(c) of ICTA (inserted by paragraph 28 of Schedule 35 to FA 2004) simply refers to regulations made by the Secretary of State. See Change 105 in Annex 1.
2411.Subsection (3) applies for the tax year 2006-07 onwards and rewrites the changes to section 660A(11) of ICTA introduced by FA 2004. A transitional rule is found in paragraph 132 of Schedule 2 to this Act which gives the rules for “approved pension arrangements” for 2005-06. The FA 2004 changes to pension provisions only apply from 2006-07.