UK - Pensions tax simplification plans are flawed and will leave a litany of overcomplicated rules, a leading consultant warns.
The Inland Revenue’s aim is to reduce eight tax regimes down to one. But PricewaterhouseCoopers says measures outlined in the Finance Bill will leave six regimes in place.
PwC says the Bill will leave taxation rules for registered schemes, employer-financed retirement benefit schemes, overseas recognised schemes, overseas unrecognised schemes, section 615 schemes and corresponding accepted schemes.
Chief actuary of pensions Trevor Llanwarne said simplification will be difficult, particularly for those with pension savings above the £1.5m limit.
“It will meet the government’s aims to provide benefit to 98% of the workforce. However, it will create enormous demand for advice from the remaining 2% of earners.”
Confirmed changes in the Bill – to be implemented from April 2006 – include a measure to allow AVCs and protected rights schemes to draw a 25% tax-free lump sum on retirement.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers