PENSION SCHEMES—IN SPECIE CONTRIBUTIONS
The recent case of Irving v HMRC [2008] EWCA Civ 6, [2008] All ER (D) 178 (Jan) was concerned with the tax treatment of a contribution by Mr Irving’s employer to an unapproved retirement benefit scheme. The employer paid £200,000 to a personal asset management company which it applied in the acquisition of shares in various companies on behalf of the employer. The shares were subsequently transferred by way of contribution to the pension scheme.
The High Court said that the phrase “pays a sum” included the transfer of non cash assets; it said that a distinction between these two funding methods made no commercial sense and could not reflect any legislative policy. I don’t know why not. The distinction seems to reflect the underlying legislative policy relating to the remittance basis where it is well established that a sum means a sum of money and not a non cash asset. And what about a company purchasing its own shares where “payment” means money, and so on? What happened to the idea about not doing violence to the words of the statute
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