Pension scheme rules are complicated, and they are constantly changing. It is essential that you take advice from a qualified independent financial adviser before drawing funds from your pension scheme, or using those funds to invest in business assets.

Before you sign any deals, check whether your financial adviser is registered with the Financial Conduct Authority, and ask about their professional qualifications.

If the strict rules are not adhered to when your pension scheme lends money to a company that you control, the loan will be treated as a payment to you personally. This will amount to an unauthorised payment from the pension fund and attract a surcharge of 55%.

Such loans can be made, but they must be from Small Self-Administered Scheme (SASS), and used only for specific purposes by the business. This includes investing in real property, such as a building, but buying movable equipment is not an approved purpose.

Be cautious in your assumptions about movable items. The directors of one company believed that the printing presses they sold to their pension fund were fixed assets as the lightest weighed around 4 tonnes, and they could not be moved easily. The plan was for the pension fund to lease the machines back to the company.

However, the tax tribunal decided that the printing presses were movable assets as it was possible to move them. The sale and lease-back transaction triggered an unauthorised payment surcharge and a sanction charge for the pension scheme.