CTM08340 - Corporation Tax: management expenses: pension contributions
A deduction is given to an employer under ICTA88/S592 (4) for
contributions to an exempt approved pension scheme. In the case of
an investment company (or a 'company with investment business for
periods starting on or after 1 April 2004), the sums the company
pays as ordinary annual contributions are allowable as management
expenses for the period in which the sums are paid. Where a
contribution is not an 'ordinary annual contribution', it is
treated as HMRC decides. There is guidance on this at IM8050 to
IM8053.
If an investment company contends that relief is due for sums
charged in its accounts, even though they were not paid in the
accounting period, you should apply the guidance at IM8057 to
IM8060, with any necessary modifications for an investment
company.
Post-cessation payments to meet pensions legislation requirements
You apply the rules set out below where, after a company's business ceases:
- the company, or
- the company's liquidator
pays a sum after 27 July 1993 to an exempt approved scheme which:
- is to meet an excess of the scheme's liabilities over its assets,
and
- is paid under:
- Section 58B of the Social Security Act 1975, or
- Section 144 of the Pension Schemes Act 1993, or
- the equivalent legislation in Northern Ireland.
Under ICTA88/S592 (6A) the rule you apply is that you treat the payment as:
- a contribution to the scheme,
- paid on the last day on which the business was carried on.
