In what comes as no surprise to many well-read tax practitioners, HMRC Guidance manuals have been shown once again to not have the force of law in a landmark tax case that could have massive impacts for SIPP planning that used in specie contributions rather than cash purchases.
SIPP administrators who relied on the Pensions Tax Manual guidelines regarding ‘in specie’ contributions may find themselves on the receiving end of an influx of disgruntled clients after HMRC wins this tax case where they challenged the validity of their own guidance when interpreting legislation governing pension contributions.
In a humbling reminder of the limits of HMRC’s powers, Judge Sinfield allowed HMRC’s challenge to the planning undertaken by a SIPPChoice client when HMRC contended that ‘contributions paid’ must include cash consideration not simply contributions in specie, notwithstanding the fact that their own manuals indicated otherwise.
Whilst it could be argued that HMRC have effectively proved themselves to be wrong by being right, it’s clear the only losers on the day were the SIPP administrators and the clients now facing hefty tax bills as a result of possibly ill-conceived planning.

https://www.ftadviser.com/pensions/2020/05/13/hmrc-wins-landmark-in-specie-tax-relief-ruling/?page=1

© All Rights Reserved The Newport Group 2022
Sitemap | Privacy Policy | Terms & Conditions
Website development by OWD