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Brown reckoned to be moving to axe or tax Asps

Fears are growing that Chancellor Gordon Brown will introduce plans to reduce the attractiveness of alternatively secured pensions or scrap them entirely in this year’s pre-Budget report.

The Treasury originally raised concern in September by warning Money Market- ing that it would scrap Asps if advisers continued to “wilfully abuse” them to avoid inheritance tax.

The intention of Asps was to offer an alternative to people with religious views objecting to annuiti- sation, such as the Plymouth Brethren.

Money Marketing now understands that one Government source has revealed plans to announce the removal of Asps in the next pre-Budget report, a year after its infamous U-turn on residential property in Sipps.

But persistent market rumours also suggest the Government will alter Asps, making them far less attractive to people outside the Plymouth Brethren.

Some commentators, including Scottish Widows head of pensions market development Ian Naismith, believe that a complete ban is unlikely as the Government will breach human rights legislation by not catering for those with objections to annuitisation.

Hargreaves Lansdown head of pensions research Tom McPhail says: “First, the Government is guilty of blatant religious discrimination without any apparent awareness of the unacceptability of its behaviour and then, rather than simply confirming that Asps can ind- eed be used by all and not just by a minority of relig- ious fundamentalists, it compounds its error by moving to close it down.”

The Treasury declined to comment.

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