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Tribunal upholds tax charge on liberation exercise

In Trachtenberg v The Commissioners for HMRC [2024] UKFTT 376 (TC), the FTT (Tax) has upheld the imposition by HMRC of an unauthorised payments charge and surcharge against a member who made loans out of his SIPP to third parties who then loaned the monies back to the member.

The FTT rejected the member’s argument that he had not acted “deliberately”, as is required for an assessment to be made under s.29 of the Taxes Management Act 1970 more than 6 years after the relevant events had occurred. Applying the definition of “deliberate” given by the Supreme Court in HMRC v Tooth [2021] UKSC 17, the FTT held that the member knew that there was a tax charge involved in his accessing his pension fund by way of loans via third parties, he deliberately chose to complete his tax returns without reference to the receipt of funds from his pension scheme and he intended that HMRC should rely on the returns which he knew to be inaccurate.

The transcript of the judgment can be found here

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