May CPD Newsbrief — Personal tax
Death charge on pension funds likely to be axed
Chancellor George Osborne expects the 55% death charge for money in pension funds to be cut following his Budget overhaul.
The Treasury has said that it will consult on cutting the 55% recovery charge on pension funds when a member dies. It is only applicable on post-75 unvested pots and drawdown pots.
Speaking at a Treasury select committee hearing on the Budget, the Chancellor said he expects the charge to be cut during the review. He says the rate needs to be changed in light of the new pensions regime, under which savers can access their entire pension pot in cash from age 55 from April 2015. “In the pensions document published alongside the Budget we specifically flagged up this 55% rate and said it was likely to be too high and designed for a different regime where they were encouraging people to exhaust pension savings by the end of their life. We have a new regime and we are consulting on the 55% rate but I would anticipate it being lower.”
The latest edition of Newsbrief counts as 1 hour of structured CPD and covers the regulatory and marketplace changes that took place during April 2014. Visit the Money Marketing CPD Centre to answer 10 multiple choice questions and complete this CPD activity.
Just click into your CPD Plan and you’ll find each month’s marketplace changes round-up in your activity list.
Not yet registered? Join for free today at www.ifacpd.com and access more than 35 hours of independent, accredited CPD learning content. Learning objectives (full list of ApEx standards covered below)