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Upper Tribunal makes important ruling on meaning of “payment” in pensions / tax case concerning unauthorised payments charges

Published: Monday 17 December 2018

Gareth Clark v Commissioners for HM Revenue and Customs [2018] UKUT 0397 (TCC)

Jonathan Davey QC has been successful in an important Upper Tribunal appeal regarding the meaning of “payment” in the context of the unauthorised payment legislative regime relating to registered pension schemes (Finance Act 2004). The case concerned a set of arrangements aimed at extracting funds from a SIPP so that they could be used to invest in the Mayfair property market.

The Upper Tribunal (Mr Justice Arnold and Judge Timothy Herrington), upholding the decision of the First-tier Tribunal (Judge Roger Berner), held that the reasoning of the Court of Appeal in Venables v Hornby [2001] STC 1221, although not directly applicable, was persuasive by analogy. The Upper Tribunal also held that the reasoning of the High Court in Venables and the High Court in Thorpe v Revenue and Customs Commissioners [2009] STC 2108 was not persuasive because in both instances the case proceeded on the basis that the funds could and would be restored to the pension fund, contrasting the present case. The Upper Tribunal considered that the High Court’s decision in Hillsdown Holdings plc v Inland Revenue Commissioners [1999] TC 561 was distinguishable from the present case for similar reasons to those given by the Court of Appeal in Venables.

The full judgment can be downloaded here.