Tuesday, 29 September 2015

HMRC Pension Transition Detail Shortfall


HMRC has revealed it is still unsure exactly how transitional protection will be on offer for those hit by the reduction in the lifetime allowance wrt pensions.

In March George Osborne announced that the maximum amount savers can put into their pension pots over their lifetime (the lifetime allowance) will be cut from £1.25m to £1m next April.

Any savings above the limit will lose tax relief, and suffer a 55% tax rate when it is eventually withdrawn.

In various pension schemes newsletters issued by HMRC it stated that it “would aim to provide further information about the transitional protection on offer”.

However, as the FT Adviser reports HMRC in its latest pensions newsletter stated: 
Unfortunately we are not able to provide as much detail as we would have liked.
This is not specifically HMRC's fault, but down to the fact that legislation for both the reduction in the lifetime allowance and the protection regimes 2016 will not be delivered until the Finance Bill 2016.

Tax does have to be taxing.

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