{
  "url": "https://openlegislation.uk/finance-act-2004/section-240",
  "json_url": "https://openlegislation.uk/finance-act-2004/section-240.json",
  "legislation": "ukpga/2004/12",
  "legislation_title": "Finance Act 2004",
  "legislation_url": "https://openlegislation.uk/finance-act-2004",
  "path": "section/240",
  "kind": "section",
  "number": "240",
  "heading": "Amount of charge",
  "text": "(1) The scheme sanction charge for any tax year is a charge at the rate of 40% in respect of the scheme chargeable payment, or the aggregate of the scheme chargeable payments, made by the pension scheme in the tax year.\n(2) But if—\n(a) the scheme chargeable payment is an unauthorised payment, or any of the scheme chargeable payments are unauthorised payments, and\n(b) tax charged in relation to that payment, or any of those payments, under section 208 (unauthorised payments charge) has been paid,\na deduction is to be made from the amount of tax that would otherwise be chargeable for the tax year by virtue of subsection (1).\n(3) The amount of the deduction is the lesser of—\n(a) 25% of the amount of the scheme chargeable payment, or of the aggregate amount of such of the scheme chargeable payments as are tax-paid, and\n(b) the amount of the tax which has been paid under section 208 in relation to the scheme chargeable payment, or in relation to such of the scheme chargeable payments as are tax-paid.\n(3A) The Treasury—\n(a) may by order amend subsection (1) so as to vary the rate of the scheme sanction charge, and\n(b) may by order amend subsection (3)(a) so as to vary the percentage mentioned there.\n(3B) An order under subsection (3A) may make provision for there to be different rates or percentages in different circumstances.\n(4) A scheme chargeable payment is “tax-paid” if the whole or any part of the tax chargeable in relation to it under section 208 has been paid.",
  "extent": "E+W+S+N.I.",
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "F",
      "label": "F1",
      "text": "S. 240(3A)(3B) inserted (with effect in accordance with Sch. 2 para. 25 of the amending Act) by Finance Act 2009 (c. 10), Sch. 2 para. 16"
    },
    {
      "type": "C",
      "label": "C1",
      "text": "S. 240 modified (24.4.2025 for the tax year 2023-24 and subsequent tax years) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2025 (S.I. 2025/419), regs. 1(2)(3), 5(2)"
    },
    {
      "type": "I",
      "label": "I1",
      "text": "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"
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/ukpga/2004/12/section/240",
    "retrieved_at": "2026-10-28T17:08:09.921968+00:00",
    "licence": "OGL-UK-3.0",
    "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
    "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
  }
}