Loan from pension scheme

Was loan an unauthorised payment?

In 2009 the BV pension scheme made a loan to BV LLP. HMRC opened an enquiry into the pension scheme tax return and decided it had made an unauthorised payment (FA 2004 s 164).This was on the basis that a loan to a limited liability partnership should be treated as a loan to the partner (ITTOIA 2005 s 863). It deemed Mr H to be the pension scheme administrator but Mr H said he was not. The taxpayers appealed.

The First-tier Tribunal found as a fact that the loan had been made from the pension scheme to BV LLP. The latter was entitled to do as it pleased with the money including passing it to Mr H. It also found that BV LLP did not trade until 2012.

The judges agreed with the taxpayers that ITTOIA 2005  s 863 applied only...