PSI17.1.21 - Tax Treatment of Approved Schemes and Payments by Approved Schemes: Tax Treatment of Approved Schemes - Deposit Administration

(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)

“Deposit administration” is a method of funding under which the contributions are deposited with a Life Office at interest and may be withdrawn either to meet pensions and other benefits falling due or, at other times, for re-investment (see PSI20.5.20). The Life Office is simply a medium of investment, and is not accepting the risk of having to meet liabilities in return for payment of premiums. Its relationship with the scheme administrator is that of debtor and creditor, like that of a banker with a depositor. In these circumstances neither pension business nor correspondence are relevant. The expression “deposit administration” is, however, one which Life Offices often use to describe what we would call a managed fund policy or even to describe “controlled funding” (see PSI20.3.13-16). Follow the instructions in PSI22.4.24-27 in these cases.

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