The government plans to exempt pension funds from changes announced today that will apply UK tax to gains made by non-residents on immovable property.
According to the Autumn Budget papers, the government wants to remove an advantage which non-residents have over UK residents by aligning the system with other countries.
All gains on non-resident disposals of UK property will be brought within the scope of UK tax and this will apply to gains accrued on or after April 2019. The government said it intends to include targeted exemptions for institutional investors such as pension funds.
Commenting on the announcement, Arc Pensions Law partner Rosalind Connor said: "The fact they are exempting the pension schemes from the change is exactly the way to go in relation to immovable property.
"It looks like the change applies to real estate. I suppose the change they are putting in place is to do with tackling unfairness in the system in relation to differences between different investors.
"From the perspective of pension scheme, they are not individual investors in that they do not reside there [in these properties], and so it is hard to see why they would be covered in this legislation."
The government will reintroduce the pension schemes bill as part of an “ambitious programme of domestic reform”, the Queen’s Speech confirmed today.
Trustees are being urged to engage early with The Pensions Regulator (TPR) during corporate transactions and to be transparent to protect savers.
Pension lifeboat funds including the Pension Protection Fund (PPF) cannot be required to pay 100% of benefits, but must ensure members remain above the poverty threshold, the European Court of Justice (ECJ) has said.
Guy Opperman has retained his post as pensions and financial inclusion minister, the Department for Work and Pensions (DWP) has confirmed.
The Pension Protection Fund (PPF) has confirmed its 2020/2021 levy rules and revealed they remain stable and broadly unchained from the previous levy year, expecting an 8% rise in collection.