RPSM07400120 - Employer Pages: Investments: When will a tax charge arise?

When will a tax charge arise?

The following transactions are examples that will lead to tax charges being due

• when the percentage limits for share investment are exceeded
• when a loan to the employer fails to meet the 5 tests
• when there is a non arms length transaction with an employer
• where the borrowing limits are exceeded
• where value is shifted out of the pension scheme
• when taxable property is acquired by the pension scheme

The scheme administrator must provide details of all unauthorised payments by submitting an event report. They should also make the member/employer aware of any unauthorised payments that arise to enable the payment to be declared by the relevant party.

The employer is obliged to report any unauthorised payments under The Registered Pension Schemes (Provision of Information) Regulations (SI 2006/567) .