HMRC refines stance on pension lump sum 'recycling'

The minutes of a pensions industry stakeholder forum meeting stated a rule is needed to tighten the practice of using a standalone pension lump sum to increase pension contributions and gain additional tax relief. The document deals with what happens when a standalone lump sum triggers the money purchase annual allowance rules. Outlined earlier this year, a money purchase annual allowance of £10,000 will apply once an individual takes advantage of the new pension flexibilities using flexible drawdown or an uncrystallised fund pension lump sum. It limits the amount of tax relief the...