It is possible to pass value from the scheme without making any payments as such. Probably the simplest example is any change to the rights attached to shares.
Andrew is a member of ABC Ltd Retirement Benefits Scheme.
ABC Ltd RBS owns 100% of the class A shares in ABC Ltd.
Andrew owns 100% of the class B shares in ABC Ltd.
Both the class A shares and the class B shares have similar rights but the class A shares subsequently change their rights so they no longer have the rights to dividends.
The result is that the value from the class A shares has passed to the B shares and therefore to the member without any payment.
Andrew will be subjected to an unauthorised payment charge equivalent to the decrease in value of the shares held by the scheme. The scheme will also suffer a scheme sanction charge.
| Glossary ( RPSM20000000) |
