RPSM04103040 - Technical Pages: Taxation: Scheme investments: Relevant stock lending

Relevant stock lending

Any relevant stock lending fees received by a registered pension scheme deriving from investments held for the purposes of the scheme are exempt from income tax unless they are derived from an investment in a property investment LLP.

Definition of relevant stock lending fee

A relevant stock lending fee in relation to an investment means any amount that has the nature of a fee which is payable in connection with a stock lending arrangement relating to investments that, but for any transfer under the arrangement, would be investments held for the purposes of the registered pension scheme.

This allows the stock lending fee to qualify for tax relief on the basis of it being income in respect of an investment held for the purpose of a registered pension scheme even though, in strictness, the investment in question (the stock) is temporarily held by someone else during the course of the stock lending arrangement.

A full definition of a relevant stock lending fee and stock lending arrangement can be found at section 129B of the ICTA 1988 and section 263B of the TCGA 1992 respectively.