HM Revenue & Customs has lost an Upper Tribunal appeal against self-invested personal pension administrator Sippchoice, which it claimed had acted as a pension liberation vehicle.
The case centred largely around the role of Sipp administrators in identifying pension liberators and scammers.
HMRC originally claimed that the Sippchoice Bespoke Sipp was used as a pension liberation vehicle on the grounds that it let members invest in Imperium Enterprises, and then indirectly access the funds through loans before the age of 55-years-old.
The taxman claimed such loans were "unauthorised member payments", and therefore liable for income tax.
HMRC accordingly charged Sippchoice customers income tax on these payments.
Sippchoice appealed agains HMRC's decision to impose the tax in the First Tier Tribunal (FTT), and won.
The tribunal said that Sippchoice had recognised the possibility that the Imperium investments were a potential pension liberation operation, had made proportionate enquiries, and concluded they were not.
It concluded that it was "reasonable" for Sippchoice to make this call.
HMRC appealed to the Upper Tribunal on the grounds that the First Tier Tribunal "erred in law" and that its finding was inconsistent with the evidence.
While the Upper Tribunal agreed that the First Tier Tribunal had made some mistakes, overall it rejected HMRC's appeal.
Commenting on the decision, law firm RPC stated: "Though fact sensitive, this decision will be welcomed by pension administrators and provides helpful guidance on the boundaries of what the tribunals will consider to be reasonable conduct on the part of pension administrators when discharging their duties."