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HMRC releases “confusing” guidance on turbo-charging

HMRC has released a guidance note on recycling of pension commencement lump sums which has been met with bewilderment.

Hargreaves Lansdown head of pensions research Tom McPhail has labelled the guidance on what is known as turbo-charging as “anything but simple”.

McPhail says a first reading appears to offer confusing guidance on when an increase in annual contributions in respect of a registered pension scheme is and is not a “significant increase” in contributions.

Gordon Brown announced in the pre-budget report last year that there will be measures to prevent the abuse of the rules for tax-free lump sums from April 6 2006. But no guidance has been provided until now as to how the issue would be policed.

McPhail says: ‘We are still dissecting the guidance but our initial response is that these rules are totally disproportionate to the scale of the issue.”


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The Turner report brought a mixed response, with reactions ranging widely. Money Marketing compiled The Turner Papers – an online special featuring the views of industry experts and here we publish a round-up by Nicola York.

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This week by freelance personal finance journalist Margaret Dibben

‘Rules add to withdrawal confusion’

New rules on income withdrawal and pension transfers have been criticised for add- ing complexity. Skandia pensions marketing manager Billy Mackay says the HMRC requirements will increase consumer confusion as well adding to the admin burden for providers. Under the new guidelines, a client who has consolidated a range of income-withdrawal plans from an existing […]

Inheritance Tax, a tax on the wealthy? Urban myth or fact?

By Kim Jarvis, Technical Manager with Canada Life’s ican Technical Services Team. Inheritance tax has been around in some form since 1796. Estate duty dates back to 1894 and over the years this tax has evolved into the inheritance tax (IHT) we know and love today, which was introduced in 1986 as a replacement for […]


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