The understanding from speaking to HMRC is that the taxable interest on enforcing the first charge would likely be the value of the debt (plus costs), not the value of the property (as djjohnson suggests).  On enforcing the charge the SSAS is legally obliged to sell the property for the best price, and is only entitled to the sale proceeeds that cover the debt.  So if the debt is £50,000 and the taxable property worth £400,000 the SSAS is only going to get £50,000.  

But I agree the Newsletter is not clear here either way.  We will try and clarify and put in writing.

Michael Smith, AMPS Committee 

Surely this is not what Newsletter 39 is saying. The reference to 'its market value' must be to the value of the interest acquired by the trustees, not the whole value of the security. If trustees take a first charge over a £1m residential property and the loan o/s when the security is called in is say £100k, the market value of their interest cannot be anywhere near £1m, but rather a figure give or take the then o/s loan.  However AMPS need to clarify this urgently with HMRC. If I am wrong, then prudent trustees who insist on low LTVs will be penalised over those who lend on a less conservative basis.