UK - MPs will be able to avoid the £1.5m lifetime savings limit following a last-minute change to the Finance Act, lawyers say.
And they claim the new provision, which was inserted into the Bill just before it received royal assent, shows “blatant favouritism”.
The change, which relates to clauses on enhanced and primary protection, will, lawyers say, give Parliamentary Pension Scheme members more favourable tax treatment than anyone else.
Primary and enhanced protection allows final salary scheme members to safeguard their savings from a tax of 25% on any pension pot above the £1.5m accrued before April 2006 – the so-called A-Day.
But the amount of pension savings that MPs have before A-Day will not be subject to the Inland Revenue cap.
Linklaters consultant Richard Kandler (pictured) said: “This could give rise to significantly more favourable tax treatment for MPs than everyone else, as it will give them greater scope for being able to receive benefits over the lifetime allowance without paying the recovery charge.
He said it was “a difference in treatment that seems practically impossible to justify”.
Scottish Equitable pension development director Stewart Ritchie agreed.
“It does look very odd and is in a long tradition of parliamentarians being far more generous to themselves than the population at large as far as pensions go.”
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