On Tuesday I noted that HMRC had issued a statement announcing a U turn on rules relating to drawdowns, by those aged between 50-54, on their pensions:
"The Government intends to bring forward regulations to remove the unauthorised payments tax charge where an individual aged 50 and over but under 55 transfers their pension in payment to another pension provider."
However, Citywire reports that there is still some confusion over this issue. They quote Skandia pension development manager, Adrian Walker, who warns that 40% charges would apply to lifetime annuity purchases made from income withdrawal funds before age 55.
"HMRC has confirmed that the draft regulations announced in that release do not cover the unauthorised payment charge that will be generated if an individual looks to purchase a lifetime annuity or scheme pension from an income withdrawal fund prior to age 55."
It is expected that HMRC will make a further statement on this matter, so as to end the confusion.
As I noted on Tuesday all of this fuss could have been avoided, if HMRC had listened to the advice given by finance professionals to it at the time.
Tax does have to be taxing.
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