The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
Pension schemes newsletter 85 20 March 2017
HMRC’s latest pension schemes newsletter includes further detail on a number of measures in connection with pensions as announced at Budget 2017 .
Qualifying recognised overseas pension schemes (QROPS) To help reach scheme members thinking about transferring to a QROPS and overseas scheme managers receiving and making transfers, HMRC has produced additional guidance, included in this newsletter as Appendix 1 and Appendix 2. HMRC is happy for you to use the wording in these in your literature or on your websites as appropriate.
Also featured in this newsletter:
Pension flexibility - reporting of non-taxable death benefits through Real Time Information (RTI) Relief at Source Scottish rate of Income Tax Lifetime Allowance Pension scheme registrations
Pension schemes newsletter 85 – March 2017
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Reducing the Money Purchase Annual Allowance – consultation response 22 March 2017
The HM Treasury have published their response to the consultation that proposed a reduction in the Money Purchase Annual Allowance (MPAA) from £10,000 to £4,000.
Contributions to pension schemes are tax free, provided that the amount paid in a tax year does not exceed the annual allowance (AA). The standard AA is £40,000, but once a person has accessed pension savings flexibly, if they wish to make any further contributions to a defined contribution (DC) pension, tax-relieved contributions are restricted to a special money purchase annual allowance (MPAA). The Government response confirms that evidence wasn’t provided during consultation to suggest that a reduction in the MPAA to £4,000 would impact on the successful roll out of automatic enrolment or that such a reduction would impact disproportionately on different groups. And as responses received during the consultation have also not provided evidence that changes the view of Government that a £10,000 MPAA is inappropriate, as from 6 April 2017 the MPAA will apply at the level of £4,000. This will apply to anyone who has already accessed savings flexibly, or does so in the future, irrespective of when that occurred.
These changes will be effected through Finance Bill 2017.
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Tax exemption on employer provided pension advice 27 March 2017
HMRC recently published guidance to help employers understand the exemption from charge where an employee is provided with pensions advice provided by their employer.
Pensions information and advice provided by an employer to employees generally is unlikely to give rise to an employee benefit tax charge and using an HMRC provided example this would include a presentation to which all employees are invited to attend.
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