Trusts and pension schemes: pension schemes: transfer of assets where the sole consideration is issue of life policy
The assets of a pension scheme may be transferred to a life company in consideration for the issue of a life policy. This is not a chargeable transaction for stamp duty (although before 13 March 2008 £5 fixed stamp duty was payable). If the Pension Fund Trustees and the Life Company Trustees are the same the transfer is A to A and the customer should be advised to produce a Letter of Direction as the stamp duty will frank the Stamp Duty Reserve Tax (SDRT) charge which would otherwise be chargeable. If the securities transferred are in dematerialised form in CREST and a letter of direction is prepared and stamped with £5 fixed duty so as to frank the Stamp Duty Reserve Tax charge the transaction in CREST may be certified using flag 5 so that no SDRT is charged.