BIM46070 - Registered pension schemes: wholly & exclusively: payments by third parties, not within FA04/S196
The legislation in FA04/S196 – FA04/S199 (
BIM46005) only applies to contributions
made by employers and former employers; remembering that employer
for this purpose includes ‘sponsoring employers’ of the
scheme.
Payments by a contributor other than a sponsoring employer do
not fall within FA04/S196. To be allowable as a deduction in
computing the third party’s trading profits a 'third party'
contribution must therefore satisfy the established general
principles of being:
- revenue expenditure,
- made wholly and exclusively for the purposes of the third party's trade, and
- deductible for the period concerned in accordance with GAAP.
There are three main situations in which someone other than an
employer or former employer (a ‘third party’) may make
contributions to a registered pension scheme on or after, 6 April
2006.
In each case the wholly & exclusively principles apply
equally to contributions by third parties, which do not come within
FA04/S196 – FA04/S199. In particular, consideration will
again need to be given to the weight of reputation and morale
purpose, in light of the facts established. Contributions by third
parties may require further consideration in the following
circumstances:
