PSI17.1.29 - Tax Treatment of Approved Schemes and Payments by Approved Schemes: Tax Treatment of Approved Schemes - Stock Lending

(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)

The tax effects of these transactions are:

1. the dividends and interest are exempt from income tax in the normal way,
2. no capital gains tax liability arises on the securities lent, and
3. the commission or fee is not income from investments and deposits. Such commission or fee received by the scheme up until 2 January 1996 is assessable on the administrator under Case VI of Schedule D. Where the commission or fee is received by the scheme under approved stock lending arrangements entered into, on, or after 2 January 1996, it is exempt from tax.

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