Abbey for Intermediaries warns in a technical note on pensions that rule changes implemented under the regime coming into effect next April could pose trouble in cases of fragmented transfers.
Citing the example of an employee’s pension rights split between different schemes, Afi suggests the Inland Revenue may start questioning just how the 25% tax-free lump sum – allowable under the new regime - is obtained. While rules may allow for the entire 25% lump sum to be drawn from, for example, one of three different scheme, AfI say the Revenue will be drawn to revisiting this set-up because of the implication that it may be missing out on some revenue. ”For non-regulated individuals the update states that whereas the Inland Revenue has been happy to allow for the maximum tax-fr...
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