Forestall rules will hit transfers with 20% tax
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."