Section 196D | Employer asset-backed contributions: denial of relief (2)

(1)An employer (“E”) is not to be given relief in respect of a contribution (“E's contribution”) paid by E under a registered pension scheme if conditions A and B are met.

(2)Condition A is that—

(a)under an arrangement (“the asset-backed arrangement”) a person (“the transferor”) makes a disposal of an asset (“the security”) to a partnership,

(b)the transferor is E or a person connected with E,

(c)the transferor, or a person connected with the transferor, is a member of the partnership immediately after the disposal (whether or not a member immediately before it),

(d)under the asset-backed arrangement the partnership receives money or another asset (“the advance”) from a person (“the lender”) other than the transferor,

(e)the advance is (wholly or partly) paid or provided by the lender out of E's contribution (directly or indirectly),

(f)there is a relevant change in relation to the partnership (see section 196H), and

(g)under the asset-backed arrangement the share in the partnership's profits of the person involved in the relevant change (see section 196H) is determined by reference (wholly or partly) to payments in respect of the security.

(3)If the transferor is not E, for the purposes of this section references to a person connected with the transferor include a person connected with E who would not otherwise be connected with the transferor.

(4)For the purposes of subsection (2)(g) it does not matter if any determination of the share in the partnership's profits of the person involved in the relevant change as mentioned is subject to any condition.

(5)Condition B is that the asset-backed arrangement is not an acceptable structured finance arrangement (see section 196E).