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Views sought on tax reform of defined contribution savings
HMRC have been granted new powers to manage pension scheme registration, as part of a government strategy to combat pension liberation.
Changes announced in last week's Budget allow the Revenue to send information notices to ask for documents and other information from an administrator and other persons to help decide whether or not to register a scheme.
A regime of penalties and appeals has been introduced in respect of the application for registration and information notices. They include a fine for false information provided in connection with an application.
Schemes must be set up and maintained for the main purpose of providing authorised pension benefits. Where HMRC believe this is not the case, registration may be refused or an existing scheme may be deregistered.
The taxman will use the new powers for all applications for registration received on or after 20 March 2014, meaning administrators and other persons may be subject to an information notice regardless of whether or not data was previously provided in connection with a registration.
Views sought on reform: the government plans to introduce a new system for how defined contribution (DC) pension savings are taxed when accessed. Under measures unveiled in last week’s Budget, individuals will be able to take their retirement pots when and how they wish after the age of 55.
The Treasury has launched a consultation document that asks for views on how to implement the reforms. The document covers areas including ensuring consumers receive proper advice. It asks if pension providers should be required to outsource delivery of independent guidance to a trusted third party.
The interaction of the reforms on defined benefit schemes are also examined, along with their impact on investment and financial markets.
Comments should sent no later than 11 June by email or by post to Freedom and Choice in Pensions Consultation, Pensions and Savings Team, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ.
