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21 September 2015
B Patel (TC4617)
In his tax returns the taxpayer a self-employed locum pharmacist claimed interest on a loan used to buy guaranteed equity bonds to fund his pension. He also claimed a deduction for the cost of acquiring the bonds. HMRC refused the claims and also imposed a penalty for careless behaviour under FA 2007 Sch 24.
The taxpayer appealed saying the bonds were to form a self-invested personal pension (SIPP) and the expenditure should be allowed against his trading income.
The First-tier Tribunal said “on no basis” could the taxpayer’s arrangements be called a SIPP. He was “just saving for his retirement”. The bonds were not a contribution to an approved pension scheme and the taxpayer was not entitled to a deduction for their purchase. Similarly the loan taken out to finance the bonds...
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