UK - Draft regulations for pension tax simplification - released this week by the Inland Revenue - will need industry tuning, Scottish Equitable claims.
The regulations provide the detail of how the simplified tax regime will operate. The industry has until November 5 to give its feedback.
Scottish Equitable pensions development director Stewart Ritchie (pictured) said the regulations “confirmed suspicions” of what would be included. But, he said, there were a number of areas which had “significant” implications for the industry.
These included confirmation that Financial Services Authority tables would replace the current Government Actuary figures used to calculate income drawdown. Ritchie warned the FSA tables – published to allow comparisons when buying annuities – were overly-complex and being “shoehorned” with drawdown in mind.
Schemes will also be expected to meet high levels of disclosure in annual reports to the revenue.
Detail will be needed on any pensions exceeding 50% of the £1.5m lifetime allowance and Ritchie warned there were “a number of new hoops for administrators to jump through”.
He added: “The revenue has done well to get the regulations out so quickly. These can now be tuned and industry afforded an entire year to adapt to changes in systems, administration and advice before A-Day 2006.”
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