PSI5.4.5 - Contributions by Employers: Approved Schemes Tax Treatment - Ordinary Rules of Schedule D

(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)

Regular payments to buy benefits, as they accrue, for arm's length employees will normally be allowed. In other situations the position is not so clear cut. The Inspector may contend that the payments are not wholly for the purposes of the trade or are of a capital nature ("capital" payments do not reduce the profits chargeable to income or corporation tax).

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