In specie payment to SIPP

Definition of contribution paid

In 2016 C made an in specie contribution of ordinary shares to a Sippchoice bespoke self-invested personal pension (SIPP). Sippchoice claimed income tax relief at source on the contribution. HMRC refused the claim. The issue was whether the contribution into the SIPP had been ‘paid’ within the meaning of FA 2004 s 188(2).

The First-tier Tribunal noted that C was legally obliged to make the contribution as a result of completing the contribution form. He was bound by the trust deed and rules and terms and conditions of the scheme. Further HMRC’s Pensions Manual at para 42100 provides that ‘it is possible for a member to agree to pay a monetary contribution and then to give effect to the cash contribution by way of a transfer of an asset or assets’. The judge said that ‘should have been the end of the matter’.

However ...