UT (Tax & Chancery) UT/2023/000103 - [2025] UKUT 00102 (TCC)

Taking into account all the above, the FTT made no error of law when carrying out the evaluative judgment required by s 268(7)(b) and there is no basis for this Tribunal to interfere with its conclusion.

We add that we agree with the FTT’s comment at [219] that this case was very different from Bella Figura. That case concerned an unauthorised payment made by a pension scheme set up by Bella Figura Limited (“BFL”), which was also the scheme administrator. BFL was owned and managed by Mr Wightman, who had no special knowledge of pensions law, see [19] of the UT decision. In contrast, MLT is a corporate trustee of numerous pension schemes. Through MLA, it also operated as “a professional pension administrator”, see [198]. Together with Clifton, it marketed and sold a structured arrangement to monetise the IP of small family businesses. Many of those companies were in financial difficulty and had failed to obtain financing through more conventional means. They had no pensions expertise and trusted MLT to be acting within the relevant statutory provisions. Instead, as the FTT said, MLT acted in a “cavalier” fashion, and consistently failed “to apply any critical analysis to fundamental aspects of the Pension Funding Deals, which…amounts to at best a passive approach to the application of the rules in favour of generating fees for themselves and other members of the group”. We agree.

In addition, the Pension Funding Deals put at risk the assets of the SSASs. As the UT said in Bella Figura “if pension funds are lent by way of risky loans to an employer, the Exchequer is exposed to the risk that, even though it has given tax relief, and exempted income and gains of the scheme from tax, the funds are not ultimately available to pay pension benefits”.

Save in respect of Langford and Fraser, we therefore endorse the FTT Decision and find that it is just and reasonable that MLT pay the scheme sanction charges.

MLT’s Appeal is allowed in relation to Langford and Fraser, but both cases must be remitted to the FTT for further consideration based on our interpretation of the relevant contracts. In all other respects, the FTT Decision is confirmed and MLT’s appeal is dismissed.