Stand-out Q – purchase an asset from a trust…

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FRI, 24 MAR 2017

Our Technical Hub provides access to a wide range of pension tax and trust technical resources. Every now and then we post tweets covering stand out questions from our technical content and our answers in case others might also find them helpful. As Twitter’s character restrictions only allow for the bare bones of the Q&A we link to the details here, too.

Question:

The member of the SIPP wishes to purchase an asset from a trust, for which he is a trustee; is this possible?

Answer:

Yes provided the transaction is carried out at arms length. If the value paid for the asset is not a legitimate market value, then “value shifting” may be deemed to have occurred. In such a situation, the difference between the value and what was paid for the asset will be treated as an unauthorised payment with the appropriate charges being levied.

The market value of an asset has the meaning given by Section 272 Taxation of Chargeable Gains Act 1992 and means the price which those assets would reasonably be expected to fetch on a sale in the open market.

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