An occupational pension scheme that is a registered pension scheme may make a loan to the sponsoring employer or any party unconnected to the member. Any loan to a sponsoring employer should be secured and made on a commercial basis. There are 5 tests that are used to determine if a loan to an employer is on a commercial basis (see RPSM07103050).
However, if any loans from any registered pension scheme are
made to the member or a connected party they will be subject to a
If your pension scheme is not an occupational pension scheme there will be no sponsoring employer. Therefore any loans made by the scheme to an employer who is connected to the member will attract a tax charge on the member.
To find out whether or not your scheme is an occupational scheme, you should contact your scheme administrator.
|Glossary ( RPSM20000000)|