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Unauthorised payment surcharge in relation to SIPP investment was just and reasonable (Rowland v HMRC)

Published on: 16 January 2020
Published by: LexisPSL
  • Unauthorised payment surcharge in relation to SIPP investment was just and reasonable (Rowland v HMRC)
  • What are the practical implications of this case?
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Pensions analysis: The First-tier Tribunal (Tax) dismissed an appeal by Mr Rowland against assessments to income tax, an income tax surcharge and a penalty for careless filing, in respect of an unauthorised payment from a registered pension scheme. He borrowed monies that were found to be connected with an investment made by his self-invested personal pension (SIPP). He conceded that his loan could be regarded as an unauthorised payment, but argued that it would not be just and reasonable to impose tax in circumstances where he was unaware of the connection between the loan and the investment made by his SIPP until long after the loan was advanced. For similar reasons, he said that he was not careless when completing his tax return. The tribunal's rejection of these arguments demonstrates the real risk of surcharges and penalties in the event of an inadvertent unauthorised payment. Written by Michael Hunt, senior associate, at Herbert Smith Freehills LLP. or take a trial to read the full analysis.

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