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Nothing but a sham

01 February 2010
Issue: 4241 / Categories: Tax cases
Benjamin James Kent (TC296)

The taxpayer belonged to two authorised personal pension schemes. In 2001 he transferred his funds out of these schemes into another pension plan administered by Holme Ltd and only open to employees of that company.

HMRC claimed that the taxpayer had never been an employee of Holme Ltd and that the transfer was therefore unauthorised within TA 1988 s 647.

They directed that the taxpayer rather than the pension schemes should be liable for the tax which should have been deducted and imposed a penalty (subsequently mitigated by 70%) on him for negligently delivering an incorrect return.

HMRC argued that this was a pension liberation scheme. A third party had set up Holme Ltd and the Holme Ltd Pension Plan.

Individuals who wanted to realise their pension funds before their retirement age...

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