CheckLists.Tax (beta)
EMPLOYMENT INCOME TAX
- Contribution by employer (exemption)
Employer contribution to registered pension scheme
- Not liable to general earnings charge (s.308).
- Not liable to s.401 charge if received in connection with termination of employee's employment (s.405).
Legislation: ITEPA, s.308; s.405;
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INCOME TAX
Contribution must be in money (not assets)
General rule
"Accordingly, we hold that the expression “contributions paid” in section 188(1) FA 2004 is restricted to contributions of money (whether in cash or other forms)." (HMRC v. Sippchoice Ltd [2020] UKUT 149 (TCC), Roth J and Judge Sinfield)
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Settlement of money debt in specie not sufficient
"[42] ... If, as we have found, “contributions paid” in section 188(1) FA 2004 means paid in money then it cannot encompass settlement by transfer of non-monetary assets even if the transfer is made in satisfaction of an earlier obligation to contribute money. An agreement to accept something other than money as performance of an obligation to pay in money does not convert the transfer of shares (or other assets) into a payment in money. I" (HMRC v. Sippchoice Ltd [2020] UKUT 149 (TCC), Roth J and Judge Sinfield)
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INHERITANCE TAX
- Contribution to registered pension scheme not a transfer of value
- A disposition by any person is not a transfer of value if it is a contribution under a registered pension scheme or a qualifying non-UK pension scheme (s.12(2)).
Legislation: IHTA 1984, s.12;
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