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No quantum of solace for in specie contributions

The FTT has rejected another appeal by a scheme administrator against the rejection of relief at source on in specie contributions into a scheme: Killik & Co LLP v HMRC [2023] UKFTT 00653 (TC). Unsurprisingly, the FTT held it was bound by the earlier decision of the UT in Sippchoice, and held that "contributions paid" was not broad enough to encompass in specie contributions. As a matter of fact, no monetary obligations had been created, in respect of which the in specie transfer operated as a discharge (and by implication an argument that HMRC guidance had been followed did not arise). Further, the FTT considered and rejected an argument relating to section 29(2) of the Taxes Management Act 1970, which precludes an assessment where a taxpayer has made a return "on the basis or in accordance with the practice generally prevailing at the time it was made". A relief at source claim was not equivalent to making a return, and anyway on the facts found the appellant did not implement the three-step process set out in HMRC guidance, which suggests a method of making in specie contributions. It should be noted that the judgment does not provide support for the validity of that method.

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