Charges

Question 1

What is an ‘Unauthorised Payment’?

Answer 1

An unauthorised payment in a pension is a payment that is not authorised by the pension legislation.

Question 2

What results in an ‘Unathorised Payment Charge’?

Answer 2

• Accessing pension benefits early.
• Transferring to a none registered pension scheme.
• Recieving money from a none registered pension scheme.
• A SSAS has been lending money to a member or borrowing too much

Question 3

What is the maximum rate of tax that can be levied on an unauthorised payment to/from a registered pension scheme?

A. 15%.
B. 25%.
C. 40%.
D. 55%.

Answer 3

D. 55%

Unauthorised payment charge plus 15% surcharge. Maximum 55%of the unauthorised payment amount.

Question 4

How is the ‘surcharge’ triggered?

Answer 4

Triggered by the amount of the total unathorised charge represenintg atleast 25% of your total pension pot.

SSAS worth £300,000 and lends Jeremy 30,000 to pay a tax bill

Unauthorised payment charge triggered as not able to lend to a member in SSAS

Charge of 40% of £30,000 = £12,000. As the loan amount is less than 25% of the the pension value the surchage will not apply