| [s196] |
An employer that makes contributions to a
registered pension scheme in respect of an
overseas resident employee may be able to make a deduction in its
accounts under section 196.
It is necessary for the payments to satisfy the normal rules
for trading income - and so must have been made wholly and
exclusively for the purposes of the trade (section 74 (1)(a) Income
and Corporation Taxes Act (ICTA) 1988, section 75 ICTA 1988 or
section 76 ICTA 1988). Any queries as to whether a contribution
meets this test should be directed to the Inspector dealing with
the employer’s own tax affairs. Guidance on the meaning of
"wholly and exclusively" can be found in the Business Income Manual
at BIM 37000 onwards.
In certain circumstances relief will be spread over more than
one year. The rules concerning the spreading of the relief given to
employer contributions are explained in
RPSM05102060 onwards.
Where a UK resident employer makes contributions in respect
of an individual who has been seconded to work for an overseas
resident employer there is no requirement that the UK employer is
reimbursed by the overseas employer. Whether or not the UK employer
is reimbursed, where a deduction is claimed, the HMRC officer
dealing with the Income Tax/Corporation Tax return of the employer
may consider enquiring into the allowability of the expense. APSS
will provide specialist advice on pensions.
| Glossary ( RPSM20000000) |
