HM Revenue & Customs (HMRC) has published its draft guidance on the disguised remuneration anti-avoidance legislation in Schedule 2 to Finance Act 2011. A substantial part of Schedule 2 forms the new Part 7A to the Income Tax (Earnings and Pensions) Act 2003.

Of particular interest to pensions practitioners are paragraphs TEMP82 to 89, which cover the exclusion from Part 7A of contributions for registered pension schemes, and the circumstances in which contributions to employer-financed retirement benefit schemes are caught by the legislation.

It is expected that the guidance will be finalised by autumn 2011 and published as part of HMRC's Employment Income Manual.

The draft guidance can be viewed online at HMRC’s website