PSI5.1.31 - Contributions by Employers: General - Contributions in Specie - Allotment of Shares

(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)

[Lowe v Peter Walker (Warrington) And Robert Cain &Sons Ltd (20 TC25)]

A company may also allot a new issue of shares to the trustees of its own scheme. Such an allotment is not an admissible trading expense under the ordinary rules of Schedule D but we may have to regard it as a sum paid by way of contribution as defined in section 592(4) ICTA 1988. Let the Divisional Manager see any case in which an issue of shares in the company itself is claimed as a contribution. It will be necessary to look closely at the precise terms of the resolutions or allotment letters. If, for example, the shares allotted were part of a bonus issue renounced by the existing shareholders in favour of the trustees, we may contend that the shares are a gift from those shareholders and not an employer contribution.

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