The £10bn hole in the pension industry – SSAS & SIPP pension Stamp Duty

Posted 17th February 2022 by ctatax-admin

Recently, The Financial Times featured our comments on business owners who may have incorrectly paid Stamp Duty Land Tax when transferring their commercial property into their SSAS or SIPP pension.

Read the full article

It’s common practice for business owners to transfer their commercial premises into their pension scheme, giving a boost to their pension pot and allowing the rental payments for the premises to add tax-free monthly contributions to their retirement plans.

HOWEVER: If you’ve made such a transfer in the last 16 years, then you may have made an error with your taxes. 

It’s common practice for pension trustees and legal advisors to advise clients making such a transfer to pay Stamp Duty Land Tax (SDLT) on the ‘transaction’ as a matter of course.

This advice is based on a flawed understanding of the legislation surrounding these transfers which treats all of them as being identical. This error has been perpetuated throughout the industry for over a decade.

We have instructed one of the leading barristers in the country to assess our findings, and he is in complete agreement with our analysis – in many instances, this SDLT payment was not due and should never have been paid.

We have already made several successful claims against recent historical transfers of this type, with the clients fully compensated for their losses by HMRC.

We also undertook extensive market research taking in some of the country’s largest and most prestigious financial and legal advisors on pension matters. Not one of them gave the correct answer with regards to this issue, nor showed any understanding of the nuances involved.

Based on our assessments of the market and estimates of the number of these transfers undertaken, we conservatively estimate the average size of the loss to individuals is up to £18,000. Some may be down by much more – anywhere up to hundreds of thousands of pounds. This is before factors like interest are taken into account, especially for those who may have made these transfers up to 16 years ago.

SDLT Refunds is a division of Cornerstone Tax.