GUY BOARDMAN v Revenue & Customs (INCOME TAX - pensions - unauthorised payment charge - whether price paid by scheme in excess of arm's length - yes) [2022] UKFTT 238 (TC) (03 August 2022)

GUY BOARDMAN v Revenue & Customs (INCOME TAX - pensions - unauthorised payment charge - whether price paid by scheme in excess of arm's length - yes) [2022] UKFTT 238 (TC) (03 August 2022)

The price paid by the SIPP for the shares in Omega 4 Ltd and Omega 9 Ltd exceeded the amount which might be expected to be paid at arm’s length, as a hypothetical purchaser would have concluded the shares alone had no value without the associated LLP interest. The SIPP acted on Mr Boardman's instructions without independent due diligence. Therefore, an unauthorised payments charge and surcharge arose. It was not just and reasonable to discharge the surcharge as Mr Boardman failed to exercise reasonable care or due diligence.

Citation
[2022] UKFTT 238
Parties
Appellant: Mr Guy Boardman; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
03 August 2022
Procedural Posture
Income Tax Appeal / First Tier Tribunal (tax) Final Judgment
Outcome
Appeal dismissed subject to amendment requested by Respondents
Legal Topics
Unauthorised Payment Charge, Pension Scheme Transactions, Arm's Length Transactions, Surcharge Discharge, Valuation of Unquoted Shares
Tax Law Pensions Law Unauthorised Payment Charge Pension Scheme Transactions Arm's Length Transactions Surcharge Discharge Valuation of Unquoted Shares

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Parties

Mr Guy Boardman

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Income Tax Appeal / First Tier Tribunal (tax) Final Judgment

Legal Issues

  1. 1 Whether the price paid by the pension scheme for shares exceeded an arm's length amount
  2. 2 Whether the unauthorised payment surcharge should be discharged as just and reasonable
  3. 3 Whether distributions were made by the LLPs

Ratio Decidendi

The price paid by the SIPP for the shares in Omega 4 Ltd and Omega 9 Ltd exceeded the amount which might be expected to be paid at arm’s length, as a hypothetical purchaser would have concluded the shares alone had no value without the associated LLP interest. The SIPP acted on Mr Boardman's instructions without independent due diligence. Therefore, an unauthorised payments charge and surcharge arose. It was not just and reasonable to discharge the surcharge as Mr Boardman failed to exercise reasonable care or due diligence.

Court Disposition

Appeal dismissed subject to amendment requested by Respondents

Orders

  • The unauthorised payments charge and surcharge are upheld.
  • Amendment to the assessment as requested by HMRC is allowed.