C1C2C3C4C6C7C8C9C10Part 4Pension schemes etc

Annotations:
Modifications etc. (not altering text)
C8

Pt. 4 modified (1.7.2008) (N.I.) (with effect in accordance with reg. 1 of the amending Rule) by The Health and Social Care (Pension Scheme) Regulations (Northern Ireland) 2008 (S.R. 2008/256), regs. 1, 124(1) (with regs. 134, 258)

C10

Pt. 4 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 35 para. 18

Chapter 3Payments by registered pension schemes

Borrowing

I1C5183Effect of unauthorised borrowing: money purchase arrangements

1

Subsection (2) applies if a registered pension scheme borrows in respect of a money purchase arrangement an amount which it is not authorised to borrow under section 182.

2

The pension scheme is to be treated as having made a scheme chargeable payment—

a

if subsection (3) applies, of an amount calculated in accordance with subsection (4), and

b

otherwise, of the amount borrowed.

3

This subsection applies if, immediately before the amount is borrowed—

APB<VA2math

4

If subsection (3) applies, the amount of the scheme chargeable payment is—

APB+AB-VA2math

5

In subsections (3) and (4)—

  • APB is the aggregate of the amounts previously borrowed in respect of the arrangement (excluding any amounts which have been repaid),

  • AB is the amount borrowed, and

  • VA is the value of the arrangement, calculated in accordance with section 182(3), immediately before the amount is borrowed.