Pensions liberation: under attack (again)
By Anne-Marie Winton
The three-pronged attack on pensions liberation schemes continues. HMRC has made it more difficult for sham schemes to gain registration, the Pensions Regulator is working to increase trustee vigilance and member education and the courts are putting schemes under close scrutiny.
In a recent development, the High Court has ruled on some preliminary issues in a case where it has been asked by the regulator to impose an injunction and order restitution in relation to the alleged misuse of pension scheme assets.
The case concerns a number of arrangements set up to accept transfers from registered pension schemes. The basic structure (as we understand it) is that each member establishes a personal management company (PMC), which becomes the principal employer of the new scheme. A transfer is then made from the old (legitimate) pension scheme and the member then ‘surrenders’ the whole of his interest in the new scheme, creating a surplus that would then be paid to the PMC (and ultimately back to the member as owner of the PMC). The end result is cash in hand to the individual concerned…
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