PSI5.5.6 - Contributions by Employers: Cessation of Trading - Scheme Established Shortly before Cessation of Trading

(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 shortly before trading stops or the business is sold, the employer's contributions would probably fail to qualify for relief under the ordinary rules of Schedule D (CIR v Anglo Brewing Company Limited, 12 TC 803 - see PSI5.4.6). But where the scheme is exempt approved the provisions of section 592(4)-(6) ICTA 1988 override the normal Schedule D treatment (see PSI5.1.3): we do not object to this. Practitioners are well aware of the position and it is rare to find such a scheme set up without a trust.

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