Sale of properties held by a pension plan

The taxpayer was the member and joint trustee of a self-invested pension plan. The scheme was administered by IPS and funded partly by bank borrowing. All the funds were invested in two commercial properties which were leased to the taxpayer’s business.

He decided to sell his business and emigrate to Gibraltar. For this he needed to prove net worth of about £2m. To enable the taxpayer to invest in Gibraltar his business sold the two properties owned by the scheme and remitted the proceeds to his bank.

IPS told the taxpayer that the assets belonged to the pension scheme and asked for the proceeds to be returned because they had to be used to provide a pension. It said there seemed to have been an unauthorised payment and this would result in a tax charge.

IPS reported the sale of the properties to HMRC Pension Scheme Services which...