PSI14.2.1 - Transfer Payments: Benefits from Transfer Payments - General

(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)

Contributions paid by an employer to an exempt approved scheme automatically qualify for tax relief under section 592(4) ICTA 88. Therefore an employer should normally contribute to a scheme only in respect of its own employees and in relation to their remuneration from and service with that employer (see PSI5.1.8). Service with a former employer should be pensioned by a later employer only if funded by a transfer payment. Thus the benefits derived from the transfer must be no more than can be secured by investment of the sum transferred in the receiving scheme up to retirement age.