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‘Europe is the best hope of overturning Asp tax charge’

The European Union could be the best route to end the 82 per cent death charge on alternatively secured pensions, according to Hornbuckle Mitchell.

Speaking at the PIMS conference, the firm’s managing director Neil Marsh said the industry may be able to persuade the EU that the new Asp tax charges are unlawful as they are focused on a specific group.

He also said a change of Government could help the situation. The Tories have hinted an end to forced annuitisation will be in their next manifesto.

Last week the House of Lords voted narrowly for a Pensions Bill amendment scrapping forced annuitisation at 75, although there is no chance of this being adopted.

Marsh said under the current arrangements, advisers need to keep in mind the options available for their clients. He said many advisers were ignoring the use of scheme pensions as a way of taking income out of a SSAS, since the A-Day changes.

He said scheme pensions take into account the individual circumstances of the client, rather than rigid Asps, and in some cases lead to a payout that is £80,000 bigger.

He said there were between 30,000 and 40,000 SSASs in the UK and a major gap in the market as many providers have pulled out.

Marsh said: “What has this Government got against people aged over 75? A change in Government or European Union action, due to the fact that this tax charge is targeting a specific group, looks like the only hope.”

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