The Personal Pension Schemes (Restriction on Discretion to Approve) (Permitted Investments) Regulations 2001

Restrictions on transactions with scheme member and others

9.—(1) Subject to paragraphs (2) and (3), no interest in an asset may be acquired by a personal pension scheme in circumstances where a member of that scheme, or a person connected with him, has an interest in that asset or, at any time in the period of three years prior to the date of the acquisition, had an interest in that asset.

(2) Paragraph (1) does not apply in relation to the transfer of eligible shares in a company in accordance with section 638(9) and (12)(1).

(3) Paragraph (1) does not apply in relation to the acquisition at market value by a self-invested personal pension scheme (“scheme A”) of an interest in commercial property in which another self-invested personal pension scheme (“scheme B”) also has an interest in circumstances where—

(a) the commercial property is leased by scheme A to—

(i) the member of scheme A for the purposes of a trade or profession carried on by him, whether or not in partnership with another person or persons, or

(ii) a company which is connected with the member of scheme A, for the purposes of a business carried on by the company,

(b) the lease is granted on normal commercial terms,

(c) the amount of the rent payable under the lease accords with a commercial rate and is supported by an independent professional valuation, and

(d) either—

(i) the member of scheme A is, or becomes within a reasonable time after the acquisition by scheme A of the interest in the commercial property, a partner in a partnership carrying on the trade or profession in question, and the member of scheme B is also a partner in that partnership, or

(ii) the member of scheme A is, or becomes within a reasonable time after that acquisition, a director of the company to whom the commercial property is leased, and the member of scheme B is also a director of that company.

(4) Except in the circumstances specified in paragraphs (3) and (5), no interest in an asset may directly or indirectly be sold or leased by a personal pension scheme to a member or a person connected with him.

(5) Commercial property an interest in which is acquired at market value by a self-invested personal pension scheme otherwise than in a case to which paragraph (1) applies may, subject to the conditions specified in paragraph (6), be leased by the scheme to—

(a) the member for the purposes of a trade or profession carried on by him, whether or not in partnership with another person or persons, or

(b) a company which is connected with the member, for the purposes of a business carried on by the company.

(6) The conditions specified in this paragraph are that—

(a) the lease is granted on normal commercial terms, and

(b) the amount of the rent payable under the lease accords with a commercial rate and is supported by an independent professional valuation.

(7) For the purposes of paragraph (4) a sale by the scheme shall not be regarded as a sale indirectly to a member, or a person connected with him, if the purchase by the member or the person connected with him took place three years or more after the sale by the scheme.

(8) In paragraphs (3) and (5) “business” means a trade, profession or any other activity carried on by the company except the activity of making or managing investments unless—

(a) those investments consist wholly of shares in 51 per cent. subsidiaries of the company, and

(b) those subsidiaries do not themselves carry on the activity of making or managing investments.

(9) In this regulation “market value” means the price which the interest in the commercial property might reasonably be expected to fetch on a sale in the open market.

(1)

Section 638 was amended by paragraph 13 of Schedule 13 to the Finance Act 2000.