This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.
X
MM+cover+small+241014
Categories:Pensions

Forestall rules will hit transfers with 20% tax

  • Print
  • Comment
Helen Pow
High-earning pension savers will lose their contribution history and could be hit with a 20 per cent tax charge if they transfer to another pension provider over the next two years.

Under the Budget's draft anti-forestalling measures, annual contributions are capped at £20,000, although savers who have been making quarterly or more frequent contributions above that can continue. But if a client transfers a pension to a new provider the contribution history is lost and they will be taxed 20 per cent on contributions over £20,000, even if they have regularly saved more than this amount.

Talbot & Muir director Nathan Bridgeman says: "This is incredibly detrimental to clients and advisers. The client is not trying to beat the anti-forestalling measures, they are simply trying to transfer their pension into a simpler arrangement.

"It defeats the whole spirit of simplification. We hope the Government sees sense here."

A spokesman at HMRC says: "Adding protection would increase complexity of compliance and administration within the context of legislation only intended to be in place for less than two years and which affects only a minority - those whose income is £150,000 or more and who wish to pay contributions of more than £20,000 a year."

  • Print
  • Comment

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

The Money Marketing CPD Centre
Build your annual CPD - you can log and plan your CPD hours for free with The Money Marketing CPD Centre.

Taxbriefs Advantage
Advantage is a digital reference source giving unbiased, independent, answers to your technical queries. Subscribe to Taxbriefs Advantage.

Have your sayEdit my profile/screen name

You must sign in to make a comment

Fund Data

Editor's Pick



Poll

Do you think Citizens Advice is capable of delivering a good at-retirement guidance service?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments