PSI1.3.23 - Establishment and Administration of Retirement Benefits Schemes: Exempt Approved Schemes and Conformity with Trust Law - Oral Trusts - Board Resolution Procedure

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

Where a scheme is set up by a resolution of a company's board of directors we need documentation to confirm that a trust has been declared. This usually takes the form of an extract from the company's minute book. The validity of the resolution must also be confirmed if the scheme is to be acceptable. We therefore need an assurance that:

20. the establishment of the scheme is within the power of the company under its Memorandum and Articles of Association, and
21. these powers are exercisable by the directors, as distinct from the shareholders, in general meeting.

This assurance may be given either in the board resolution itself or in a separate certificate signed by the company secretary. If the evidence is not sent with the application for approval you should ask for it. The scheme rules should be annexed as a schedule to the minute of the resolution, though where the rules are only in draft form their attachment is not essential as long as the members have been given a suitable announcement (see PSI1.3.31). The initial resolution should state that the rules are subject to any modification required to secure Revenue approval of the scheme. If necessary a further resolution should confirm the adoption of the rules in their final form (see also PSI1.3.7).