Revenue & Customs’ proposals to apply IHT to pensions would mean hundreds of thousands of retired people would have to alter their exis-ting arrangements, warns Scottish Equitable pensions development director Stew- art Ritchie.Ritchie says if the proposals go through unchanged, this will add to the anticipated pre-A-Day logjam as advisers struggle to position their clients’ pension arrangements. ScotEq, along with Standard Life and several other insurers, is forcefully lobbying the Revenue to remove the threat of IHT on non-annuitised pension pots after A-Day. ScotEq has 34,000 clients in drawdown or phased retirement, all of whom would face IHT on their pension pots at death unless they buy an annuity by age 75. The Revenue’s consultation closes at the end of the month. Standard Life marketing technical officer John Lawson says the Revenue proposals fly in the face of the Government’s plans to simplify pensions and allow greater flexibility around retirement. With the onus switching to the individual to prove they are not trying to reduce their estate by not buying an annuity, he says the level of documentation this will introduce will add up to a massive burden. Ritchie is warning that A-day is drawing ever nearer and these issues need addressing quickly so people have time to plan. He says: “There is a real time pressure here. What happens if someone dies before they can rearrange their retirement arrangements?” Lawson says: “There is no need for the current rules to change. It affects everyone and is almost an excuse to raise a lot of extra revenue.”
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