RPSM07103200 - Technical Pages: Investments: Loans: Loans made to employers before 6 April 2006

Loans made to employers before 6 April 2006

Where an occupational pension scheme made a loan to a sponsoring employer before the 6 April 2006 the existing loan will not be subject to the new rules on employer loans providing that all the following criteria are satisfied

• the occupational pension scheme becomes a registered pension scheme
• there is no alteration in the repayment terms of the loan on or after 6 April 2006
• the repayment date of the loan (capital and interest) is after 6 April 2006.

If after the 6 April 2006 there is a change in the repayment terms of a loan taken out prior to 6 April 2006, any amount owing (including interest) will be subject to the new rules.

A postponement of the repayment date (a rollover) of a loan made before 6 April is not treated as a change in repayment terms if

• there is an amount outstanding on the date by which the amount should have been paid
• the rollover does not exceed a period of more than 5 years
• there has been no previous rollover on or after 6 April 2006
• there are no other changes to the repayment terms of the original loan.