Pension contributions on sale or cessation

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Pension contributions on sale or cessation
  • Payments under <a class="remotelink" href="/tolley/guidance/corporatetax/linkHandler.faces?linkInfo=F%23GB%23UK_ACTS%23sect%2575%25num%251995_26a%25section%2575%25&amp;A=0.5918111928818567&amp;bct=A&amp;ps=&amp;risb=&amp;service=citation&amp;langcountry=GB" target="_parent">s 75</a> of Pensions Act 1995

For guidance on tax relief for employers making payments into employees’ pensions, see the Pension contributions guidance note.

This guidance note outlines some additional factors to take into account regarding pension contributions on cessation or sale of a business.

Payments under s 75 of Pensions Act 1995

In certain circumstances, employers may be required to make payments under Pensions Act 1995, s 75 (subscription sensitive) to top up deficits in pension funding. This occurs commonly on the sale of a subsidiary company shares or trade.

Payments under Pensions Act 1995, s 75 (subscription sensitive) may be due on cessation / sale or afterwards. Additionally, it is possible for employers (or certain other parties eg another group company) to enter into Approved Withdrawal Arrangements (

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