Taxes Consolidation Act 1997 section 790E

Taxation of certain investment returns to relevant pension arrangements

Section 790E removes the normal pension tax reliefs where an ARF investor's assets are used in a way that channels investment returns to a connected person's pension scheme.

• Where ARF assets are invested in a fund in which a connected person's pension scheme also invests, and there is an arrangement linking the pension scheme's returns to the ARF investment, the usual tax exemptions for pension scheme income and gains do not apply.
• The relieving provisions disapplied include those in Part 30 (income arising from pension scheme investments) and section 608(2) and (3) (capital gains on pension scheme investments).
• The income and gains that lose their exemption are those arising to the pension investor, meaning the pension scheme of the person connected with the ARF investor.
• Any such income or gains are chargeable to income tax on the trustees or administrator of the connected person's pension scheme under Case IV of Schedule D.