The FTT has ruled in favour of HMRC in a long and complex judgment (Dalriada Trustees Ltd & Ors v HMRC [2023] UKFTT 314 (TC)).
The case concerned the tax consequences of certain transactions implemented by six registered occupational pension schemes, collectively known as the Ark Schemes. The Ark Schemes operated a “pensions reciprocation plan” (PRP), which was meant to allow members access to their pension capital before retirement but without triggering an unauthorised payment.
The FTT was not persuaded that the intended tax outcome was achieved, and found that there were numerous unauthorised payments.
The FTT expressed sympathy for some of the individuals caught up in the scheme, but dismissed appeals against HMRC’s refusal to discharge liabilities to the scheme sanction charges.
The FTT then added:
“We realise that the outcome of these proceedings will not be at all welcome either to Dalriada or to the members of the Ark Schemes, who have already had to endure great hardship as a result of the regrettable history of this matter. We are indebted to Ms Brooks for drawing our attention at the hearing to the plight of so many of the members and the unfortunate consequences for them of our decision. Although those matters sadly have no bearing on the legal analysis in relation to the construction of Section 160(2), on which so much of this decision turns, they may well have a bearing on whether, in the case of any particular member, the imposition of an unauthorised payments surcharge was just and reasonable.”
https://www.bailii.org/uk/cases/UKFTT/TC/2023/TC08771.html
Related content from Claritax Books
Pension Tax Guide is a thorough and practical guide to the complexities of the UK pension rules, and to the part they play in legitimate tax planning. Suitable for accountants, tax specialists and other finance professionals, the book is written by Katharine Lindley, a client director with EQ Investors.
