PSI5.1.33 - Contributions by Employers: General - Contributions in Specie - Treatment

(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)

A contribution in specie should be treated either as an ordinary annual contribution or a special contribution according to the ongoing level of employer contribution recommended by the actuary to the scheme. If, for example, the contribution for a particular year is made in specie and has an agreed market value of £100,000 and the ordinary annual level of employer contribution recommended by the scheme actuary at the last valuation was £40,000, then £60,000 should be regarded as a special contribution and as such it must be actuarially justified (see PSI5.3.3). We should then consider the spread forward of tax relief on the special contribution under section 592(6) (see Section 3 of this Part).

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