A payment by a SIPP or SSAS that is not authorised is an ‘unauthorised payment’ and is likely to give rise to tax charges on the member(s) and the pension scheme (via the Scheme Administrator), and in the case of a SSAS, the sponsoring employer. There will also be a tax charge where a pension scheme exceeds the borrowing limit.
Total tax charges for an unauthorised payment could be as high as 70% of the amount of the unauthorised payment.
The tax charge on any borrowing that exceeds the 50% limit is 40% of the excess.
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