Foolishness caused error

Unauthorised payments from pension schemes

The taxpayer who was an independent financial adviser (IFA) paid sums he had received from his pension plans with Pearl Assurance and Scottish Life into a self-invested personal pension plan (SIPP). However it was not possible to transfer to the SIPP originally selected and it took three years to achieve the new arrangement. In the meantime he deposited the fund into a personal bank account which he opened for that specific purpose.

HMRC said the payments from Pearl and Scottish Life were unauthorised and chargeable to tax under FA 2004 s 208 at 40% and a surcharge under s 209 at 15%. The taxpayer appealed. He said he had transferred his pension funds to the SIPP as he had always intended and that no unauthorised payments had been made.

The First-tier Tribunal said the payments must be regarded...