HMRC have published a GAAR Advisory Panel opinion dated 29 October 2024 on further arrangements which sought to use the creation and transfer of pension obligations. In this particular set of circumstances pension benefits were awarded to two directors of a company. Those pension obligations were then transferred from the company to the two directors personally – with each director assuming the pension obligation for the other in return for a sum of money paid by the company to each director. The payments were equal to the value of the pension liability each had assumed.
The company contended that the arrangements created a corporation tax deduction with no corresponding taxable employment income with the same period.
Noting the unusual practice of an individual assuming an obligation to pay a pension particularly given the exposure to economic risk over a potentially very long period (literally a...
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HMRC have published a GAAR Advisory Panel opinion dated 29 October 2024 on further arrangements which sought to use the creation and transfer of pension obligations. In this particular set of circumstances pension benefits were awarded to two directors of a company. Those pension obligations were then transferred from the company to the two directors personally – with each director assuming the pension obligation for the other in return for a sum of money paid by the company to each director. The payments were equal to the value of the pension liability each had assumed.
The company contended that the arrangements created a corporation tax deduction with no corresponding taxable employment income with the same period.
Noting the unusual practice of an individual assuming an obligation to pay a pension particularly given the exposure to economic risk over a potentially very long period (literally a...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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