RPSM07109740 - Technical pages: Investments: Taxable property: Transitional protection: Extension of transitional protection for indirect holdings: Loss of protection

Extension of transitional protection for indirect holdings: Loss of protection

Protection will be lost as set out in the following paragraphs. The indirect holding becomes taxable at the date of the first trigger event and the amount of the unauthorised payment is the market value on that date. This value is also taken as the acquisition cost for any capital gains calculations to determine the amount of the scheme chargeable payment on the disposal of the property.

Residential Property

Transitional protection is lost in respect of residential property when

• The pension scheme's interest in the vehicle, which holds the property directly, changes such that the pension scheme would have been prohibited from holding that interest if the pension scheme had held it immediately before 6 April 2006.
• The property ceases to be used for the purposes of the person's property rental business.
• The property is occupied or used by a member of the pension scheme or by a person connected with such a member.

Tangible Moveable Property

Transitional protection is lost in respect of tangible moveable property when either,

• The interest the pension scheme has in the vehicle, which holds the property directly, changes such that the pension scheme would have been prohibited from holding that interest if the pension scheme had held it immediately before 6 April 2006.
• The tangible moveable property, while still held by the vehicle directly, ceases to be used for the purposes either of the trade, profession or vocation it carries on or for the vehicle's administration or management.