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New regulations will remove the unauthorised payments tax charge where an individual aged 50 or over but under 55 transfers his or her pension in payment to another pension provider.
The regulations will be backdated to cover transfers made on or after 6 April 2010.
When the normal minimum pension age increased from 50 to 55 on 6 April 2010, individuals could start receiving their pension payments without being subject to the unauthorised payment charge only when they were aged 55 and over.
The charge did not apply to individuals aged 50 and over but under 55 who started drawing their pension before 6 April 2010.
However, the legislation unintentionally imposes the charge if an individual transfers his pension before reaching age 55 to a new provider.
The new regulations will ensure that no unauthorised payment tax charge will arise in such circumstances.
