(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)
There is no objection in principle to a large
self-administered scheme investing funds in the employer company
either as a loan or in the acquisition of shares. However, the
Occupational Pension Schemes (Investment of Scheme's Resources)
Regulations 1992 (SI 1992/246) restrict
investment in employer-related investments (except in schemes
with less than 12 members, where all the members are trustees and
all have agreed in writing to the self-investment) to 5% of the
current market value of the scheme's resources. The policing of
this limit is a matter for the Occupational Pensions Board not the
Inland Revenue. Where money is invested with the employer check
that the transaction appears to be genuine and on commercial terms.
(The employer should not use the scheme as a source of cheap
capital as occurred in the case of Evans V London Co-op
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
Any case where it is subsequently established that there are
unsatisfactory features should be referred to Compliance Audit
Section for information purposes. They, or our Compliance
Inspector, will give advice if appropriate.
