Taxes Consolidation Act 1997 section 779A

Transactions deemed to be pensions in payment

Section 779A ensures that investment transactions of small self-administered pension schemes are carried out on an arm's length basis, by treating non-arm's length transactions as pension payments subject to tax.

• Where assets of a retirement benefits scheme are used in a transaction that would be treated as a distribution if the assets were held in an approved retirement fund (ARF), the use of those assets is treated as a pension paid under the scheme and is subject to tax accordingly.
• The amount treated as a pension payment is calculated in accordance with the ARF distribution rules in section 784A.
• Any amount treated as a pension payment under the scheme is no longer regarded as an asset of the scheme for any purpose.
• Where the acquisition or sale of property gives rise to a deemed pension payment, that property is not regarded as an asset of the scheme.