In a straight-forward case of a direct interest in the taxable property being held by the pension scheme itself, or by a vehicle which is wholly owned by the scheme (whether or not via a number of other wholly owned vehicles), the deemed unauthorised payment is equal to the whole of the total taxable amount (FA 2004, Sch. 29A, para. 41(1)).

Where the scheme holds an indirect interest in the taxable property via a vehicle which is not wholly owned, that part of the total taxable amount apportioned to the scheme (and which then becomes the amount of the unauthorised payment) is determined by the extent of the scheme’s interest in the vehicle (FA 2004, Sch. 29A, para. 41(6)).

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