Clark - Court of Appeal of England and Wales finds that there can be a payment even where there is a resulting trust in favour of the payor

The UK taxpayer argued that a transfer out of his self-invested personal pension plan to another pension plan was not subject to tax for an unauthorized “payment” out of the first plan on the grounds that the second plan was a trust that was void for uncertainty, so that there was a resulting trust of the transferred funds in favour of the first plan, i.e., there was no beneficial transfer. In rejecting this submission, Henderson LJ stated:

[T]he natural reaction of anybody to the question whether there had been a payment of the £2.115 million by Suffolk Life to the LML Pension would surely be that of course there had. The money was intended to pass from the control and supervision of one registered pension scheme to another … . From a practical and common-sense perspective, why should it make any difference to this analysis if it later transpired that, unknown to everybody at the time, the transfer was in fact defective and gave rise to a resulting trust? In the context of the carefully designed scheme of the 2004 Act, one would not expect the meaning of an everyday word like "payment" to depend on legal niceties of that kind.

Neal Armstrong. Summary of Clark v HM Revenue and Customs, [2020] EWCA Civ 204 under General Concepts – Payment and Receipt.