Q&As

I act for a limited company lending significant monies to a connected private pension scheme in exchange for a mortgage over pension scheme owned commercial property. The money is to be used by the pension scheme to re-pay some but not all of a commercial loan secured on other property to a high street lender. I am using a legal mortgage over a property (often referred to as a 'legal charge') granted by an individual borrower in favour of an individual lender, securing a loan in excess of £25,000 that has been borrowed for the purpose of the borrower's business. I am aware of the business loan exemption in article 60C (3) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. Would the use of the monies by the pension scheme as above constitute being used wholly or predominantly for the purpose of its business?

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Published on LexisPSL on 02/11/2015

The following Financial Services Q&A provides comprehensive and up to date legal information covering:

  • I act for a limited company lending significant monies to a connected private pension scheme in exchange for a mortgage over pension scheme owned commercial property. The money is to be used by the pension scheme to re-pay some but not all of a commercial loan secured on other property to a high street lender. I am using a legal mortgage over a property (often referred to as a 'legal charge') granted by an individual borrower in favour of an individual lender, securing a loan in excess of £25,000 that has been borrowed for the purpose of the borrower's business. I am aware of the business loan exemption in article 60C (3) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. Would the use of the monies by the pension scheme as above constitute being used wholly or predominantly for the purpose of its business?
  • Purpose of the pension scheme:
  • Wholly or predominantly for the purpose of its business?

Purpose of the pension scheme:

Some schemes like small self-administered schemes (SSASs) may, through its trustees, borrow from any source subject to the borrowing limit of 50% of the net value of the fund immediately prior to the date of borrowing and also make loans from the scheme to the scheme employer, again subject to certain prescribed restrictions. It is not clear from the particulars of the question being asked whether a SSAS is being referred to here. Other types of scheme cannot borrow in the particular prescribed way that SSASs can b

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