David Foulkes v The Commissioners for HMRC
Decision date: 10 April 2024
Neutral citation: [2024] UKFTT 322 (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 a £13,040 loan received by Mr Foulkes after transferring an £18,309 pension into an Alderley scheme was an "unauthorised member payment" under FA 2004, and whether the 15% unauthorised payments surcharge should be discharged. The Tribunal found a causal link between the loan and the scheme's investment in Haimachek, treated the loan as an unauthorised member payment, reduced HMRC's original charges to reflect the loan amount (total charge £7,172) and refused to discharge the surcharge.
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
A third‑party loan can constitute an unauthorised member payment where there is a causal link between the loan and a particular investment made by the pension scheme; that causal link may be established by timing, the flow of funds, and documentary references tying the loan to entities or accounts used in the scheme investment, even if the loan agreement does not expressly condition the loan on that investment.
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 indicated that a recipient's or advisers' genuine belief that a payment is legitimate does not convert a non‑pension third‑party loan into an authorised pension error under regulation 13 if the payment was never intended as a pension benefit, and that the fact scheme assets remained intact does not prevent treating a related third‑party payment as a benefit for Part 4 purposes.