In HMRC v Sippchoice Ltd [2020] UKUT 0149, the Upper Tribunal (UT) denied Income Tax relief for in specie contributions to a pension plan. Transfers of non-cash assets are not ‘contributions paid’.

Members of a Self-Invested Personal Pension (SIPP) notified the SIPP of their intention to make cash contributions to the plan.

The UT allowed the appeal saying that the expression 'contributions paid' in s.188, Part 4 Chapter 4 of FA 2004 is restricted to contributions of money, whether in cash or other forms.

The UT considered the fact that the HMRC’s pensions manual contained sections which supported the taxpayers’ case and it was of little significance. They were not arguing that they had relied on the manual or that they had a legitimate expectation that HMRC would not deviate from their own guidance.

Useful guides

Pensions: Tax rules and planning
Pensions are a tax-advantaged method of saving: funds inside a pensions wrapper are not subject to tax and so income and capital grow tax-free within a registered scheme, while contributions can attract tax relief.

DIY Small Self-Administered Pension schemes
An SSAS can be set up by an employer to provide benefits for members, usually on a defined contribution (money purchase) basis and run by solely by member trustees. You can create and run your own SSAS.

Pensions: Unauthorised payment charges
What is a pensions unauthorised payment? When does a tax charge arise? Who pays the charge?

External link

HMRC v Sippchoice Ltd [2020] UKUT 0149