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Hornbuckle Mitchell calls for support for ASP petition

Hornbuckle Mitchell is calling on advisers and their clients to sign up to a Downing Street petition calling on the Prime Minister to abolish the 70 per cent ‘unauthorised payments’ tax on pension assets passed to heirs from an Alternatively Secured Pension.

Managing director Neil Marsh says:
 
“The Government has seriously underestimated the strength of feeling on this issue. One member of the public is clearly so angry at the draconian tax charges that now apply to funds passed on from ASP to have launched this Downing Street petition which also gives IFAs and their clients the chance to register their own disapproval.
 
“With recent signs that the Government may be willing to rethink its rules, now is the perfect time to add weight to the argument for change.”
 
Marsh says the introduction of ASP had been a major step forward to encourage pension saving because it ended forced annuitisation at age 75 and tapped into people’s desire to pass on pension assets to make sure their children and grandchildren never became a burden on the state.
 
But the decision by Economic Secretary to the Treasury Ed Balls in December to impose the 70 per cent unauthorised payments charge – on top of 40 per cent inheritance tax – on funds passed on had virtually killed off any positive effects of ASP.
 
Marsh says: “ASP was a winning idea that could have reaped the Treasury millions of extra revenue in inheritance tax from the few thousand each year who would have taken advantage of it,” he said.  “Instead we have been burdened with astronomical tax rates not seen since the bad old days of Labour taxation in the 1970s.
 
 “Can tax at this level ever be justified? And is it right that funds passed on by someone dying on their 75th birthday are taxed at more than 80 per cent but at only 35 per cent for someone dying just one day earlier? The rule shatters any illusion of a progressive tax regime.”
 
The Downing Street petition calling for the abolition of the 70 per cent unauthorised tax charge has a closing date of March 31 and can be viewed at:
 
http://petitions.pm.gov.uk/annuities
 

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