RPSM05102035 - Technical Pages: Contributions and tax relief: Employer contributions: Contributions made in-specie

Contributions made in-specie

In-specie contributions in their strictest sense are not allowed. The legislation is framed in such a way that contributions have to be expressed as cash sums. But what is allowed is for an employer to agree to pay a monetary contribution and then to settle this debt by way of a transfer of an asset or assets.

For example, if an employer wishes to pay a contribution he cannot do this by merely saying 'take this asset and whatever it is worth that is my contribution'. What he must do is to say that he wishes to pay a contribution of a specified monetary sum, say, £10,000. If the scheme agrees, this debt may be paid by the employer through a transfer of an asset of that market value. If the asset is of a lower market value the balance will be paid in cash.