Killik & Co LLP v The Commissioners for HMRC
Decision date: 25 July 2023
Neutral citation: [2023] UKFTT 653 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This case concerned whether in specie transfers (share transfers) to a SIPP qualified as "pension contributions paid" for relief at source. The Tribunal held the statutory phrase is limited to monetary contributions unless a bona fide cash contribution debt existed and was discharged (or another statutory exception applied), and on the facts no such debt or required offset mechanism had been created; the appellant's appeals were dismissed. The Tribunal also held the PGP protection in TMA s.29(2) did not apply to RAS claims and found no PGP in any event.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The ratio is that "pension contributions paid" in s.188 FA 2004 should be construed as referring to monetary contributions unless an asset transfer genuinely discharges a pre‑existing cash contribution debt (or falls within a specific statutory exception such as s.195). Where HMRC's guidance requires a three‑step mechanism (creation of a cash debt, a separate acquisition agreement, and an offset), relief will only be available if that mechanism is implemented; absent that, an in specie transfer is treated as an asset acquisition, not a monetary contribution.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal endorsed the 2009 HMRC guidance as correctly stating that a formal cash contribution debt is required for in specie transactions to qualify, and observed (obiter) that, in practice, an offset might be achieved by exchange of matched correspondence so no cash need pass, provided obligations and valuations are matched and implemented; however no clear obiter expanding liability or a different rule was laid down.