(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 35% tax charge under section 601(2) is extended by
section 601(6) to cover any transfer of assets to the employer or
transfer of money’s worth. Further guidance on this can be
found in
PSI20.7.12-14 although this
is not a situation which is confined solely to a surplus position.
You should note in particular that the writing-off or waiving of
the whole or part of a loan made by a pension scheme to an employer
constitutes a “transfer of money’s worth” and is
therefore chargeable to tax under section 601(2). The writing-off
or waiving of a loan (or part of it) is normally a formal process
involving a complete release from the debt rather than the debt
simply becoming irrecoverable.
