It is also possible to pass value from a registered pension scheme through lease transactions.
XYZ Ltd Retirement Benefit Scheme owns a property.
The scheme sells the freehold of the property to XYZ Ltd (the sponsoring employer) for a minimal amount subject to a leaseback to the scheme for 100 years and the scheme paying a ground rent of £1 per year.
XYZ Ltd subsequently increases the rent to £10,000 per year.
Altering the rights to the lease in this way has passed the value of the property from the scheme to XYZ Ltd.
XYZ Ltd will be subjected to an unauthorised payment charge to the value of the decrease in value of the property held by the scheme. The scheme will also suffer an scheme sanction charge.
| Glossary ( RPSM20000000) |
