Readers’ forum: Implications of reversed pre-Budget pension withdrawals

Before the 30 October 2024 Budget rumours were swirling around regarding various aspects of the tax implications of pensions. As in the past few years there were suggestions that the tax relief for premiums paid by higher-rate taxpayers might be restricted. This then seemed to be superseded by comments that the tax-free lump sums that could be withdrawn would be reduced from £268 275 to £100 000. This resulted in people (including some of my clients) withdrawing tax-free cash from their personal pensions. In the event of course these rumours came to nothing and no change was made to the lump sum allowance. However I now read that some pension funds appear to have allowed their clients to repay these sums back into the pension within a ‘cooling-off’ period of a few weeks.

I now understand that HMRC does not agree that such repayments can...