Reasonable belief

Unauthorised payments from pension scheme

Sippchoice Ltd operated a self-invested personal pension scheme Sippchoice Bespoke SIPP. HMRC alleged it was used as a pension liberation vehicle under which members were able to invest their funds in Imperium Enterprises Ltd which then allowed them to access the funds indirectly as loans before the age at which members are permitted to obtain such benefits – 55.

HMRC said the loans were unauthorised member payments for the purposes of FA 2004 s 160(2). It imposed an unauthorised payments charge under s 208 on the members and sanction charges on Sippchoice although it accepted that the operator was unaware of the detail of the arrangements.

The First-tier Tribunal found for the taxpayer on the ground that it did not believe unauthorised payments were being made and that belief was reasonable. HMRC appealed.

The Upper Tribunal proceeded on the basis that...