PSI17.1.35 - Tax Treatment of Approved Schemes
and Payments by Approved Schemes: Tax Treatment of Approved Schemes
- Tax Treatment Of Scheme Investments - 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)
We are sometimes asked about the tax treatment of the
investments acquired by self- administered schemes. In respect of
approved schemes exemption from tax is given for:
[PN17.10(a)]
- income from investments or deposits held
for the purposes of the scheme (section 592(2)),
[PN17.10(b)]
- income from transactions relating to
futures contracts and options contracts (section 592(2) by virtue
of section 659A (inserted by section 81(2) Finance Act 1990),
[PN17.10(c)]
- underwriting commissions applied for the
purposes of the scheme which would otherwise be chargeable under
Case VI of Schedule D (section 592(3)),
[PN17.10(d)]
- income tax on profits or gains arising from
transactions in certificates of deposit,
[PN17.10(e)]
- profits from sale and repurchase agreements
(repos) and “Manufactured payments” (SI 1995 No 3036),
and
[PN17.10(f)]
- capital gains tax on gains arising from the
disposal of the scheme investments (paragraph 149(B)(1)(g),
Schedule 29 ICTA 1988)
Income from trading by an exempt approved scheme does not fall
within the exemption in a. above since it is not income derived
from investments or deposits. However, section 659 provides for
contracts entered into in the course of dealing in financial
futures or traded options to be regarded as investments for the
purposes of section 592(2).
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