Section 162 Meaning of “loan”I1

United Kingdom

(1)

This section applies for the interpretation of this Chapter.

(2)

“Loan” does not include the purchase of or subscription to debentures, debenture stock, loan stock, bonds, certificates of deposit or other instruments creating or acknowledging indebtedness which are—

(a)

listed or dealt in on a recognised stock exchange (within the meaning of F1section 1005 of ITA 2007), or

(b)

offered to the public.

(3)

A guarantee of a loan made to or in respect of a F2person who is or has been a member or sponsoring employer of a registered pension scheme F3, or to or in respect of a person who is connected with a person who is or has been a member or sponsoring employer of a registered pension scheme but is not F4such a person, is to be treated as a loan to or in respect of the person who is or has been a member or sponsoring employer of an amount equal to the amount guaranteed.

(4)

If a F5person who is or has been a member or sponsoring employer of a registered pension scheme F6or a person who is connected with a person who is or has been a member or sponsoring employer of a registered pension scheme but is not F7such a person—

(a)

is liable to pay a debt, the right to payment of which constitutes an asset held for the purposes of the pension scheme, but

(b)

is not required to pay it by the relevant date,

the debt is to be treated as a loan made by the pension scheme to the person who is or has been a member or sponsoring employer on that date.

(5)

The relevant date is the date by which a person at arm’s length from the pension scheme might be expected to be required to pay the debt.

F8(6)

For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

Annotations

Textual amendments

F1: Words in s. 162(2)(a) substituted (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 468(2) (with Sch. 2)
F2: Words in s. 162(3) inserted (retrospective to 6.4.2006) by Finance Act 2006 (c. 25), s. 161(2), Sch. 23 para. 5(a)
F3: Words in s. 162(3) inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 6(2), 64(1)
F4: Words in s. 162(3) substituted (retrospective to 6.4.2006) by Finance Act 2006 (c. 25), s. 161(2), Sch. 23 para. 5(b)
F5: Words in s. 162(4) inserted (retrospective to 6.4.2006) by Finance Act 2006 (c. 25), s. 161(2), Sch. 23 para. 5(a)
F6: Words in s. 162(4) inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 6(3), 64(1)
F7: Words in s. 162(4) substituted (retrospective to 6.4.2006) by Finance Act 2006 (c. 25), s. 161(2), Sch. 23 para. 5(b)
F8: S. 162(6) substituted (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 468(3) (with Sch. 2)

Commencement

I1: Ss. 160-274, 281, Schs. 30-35 in force at 6.4.2006 but any power to make an order or regulations under those provisions may be exercised at any time after Royal Assent, see s. 284

Notes on Part 4

Modifications

C1: Pt. 4 modified (N.I.) (1.4.2006) by The Firemens Pension Scheme Order (Northern Ireland) 2006 (S.R. 2006/210), arts. 1(2), 103
C2: Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 9, 10
C3: Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 12
C4: Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 13(5)
C5: Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 26
C6: Pt. 4 modified (31.12.2007) by Police and Justice Act 2006 (c. 48), s. 53(1), Sch. 3 para. 7; S.I. 2007/3203, art. 3(b)
C7: 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)
C8: Pt. 4 modified by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), reg. 5A (as inserted (6.4.2006) by S.I. 2008/2990, arts. 1(1), 3)
C9: Pt. 4 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 35 para. 18
C10: Pt. 4 modified (19.7.2011) by Finance Act 2011 (c. 11), Sch. 18 para. 14(3)
C11: Pt. 4 applied (with modifications) (with application in accordance with Sch. 22 para. 1 of the amending Act) by Finance Act 2013 (c. 29), Sch. 22 para. 1(2)
C12: Pt. 4 modified (17.7.2014) by Finance Act 2014 (c. 26), Sch. 6 para. 1(2)(3)
C13: Pt. 4: power to amend conferred (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), s. 4(3)
C14: Pt. 4 modified (15.9.2016) by Finance Act 2016 (c. 24), Sch. 4 para. 1
C15: Pt. 4 modified (15.9.2016) by Finance Act 2016 (c. 24), Sch. 4 para. 9(2)
C16: Pt. 4 modified (with effect in relation to the tax year 2024-25 and subsequent tax years) by The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52), regs. 1(2)(3), 6
C17: Pt. 4 modified (14.7.2026 for the tax year 2014-15 and subsequent tax years) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2026 (S.I. 2026/673), regs. 1(2), 10

Notes on Chapter 3

Modifications

C1: Pt. 4 modified (19.7.2011) by Finance Act 2011 (c. 11), Sch. 18 para. 14(3)
C2: Pt. 4 modified (with effect in relation to the tax year 2024-25 and subsequent tax years) by The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52), regs. 1(2)(3), 6