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We have been asked to advise in the case of a Guernsey retirement plan which is a trust with a UK resident beneficiary.
The plan was set up in 1982 as a ‘normal’ UK pension scheme by the limited company owned by the beneficiary. That company was taken over in 1997. In 1992 the plan adopted model rules for small self-administered pension schemes and in 1997 Guernsey trustees were appointed.
In 2003 tax was paid under TA 1988 s 591. For some reason it was paid on a negotiated basis that was somewhat less than the sum actually charged under the assessment.
In 2008 the principal and only beneficiary (long retired) took out a sizeable loan from the trust. It carries interest that has been accruing and has not been paid.
Further there was also a smaller loan to the principal beneficiary’s son on which interest has been...
