HMRC acts to close tax-free cash loophole

The new amendment order is designed to stop people from taking a pension commencement lump sum (PCLS), or tax-free cash, higher than the normal 25% limit which came into effect on A-Day without meeting certain requirements. HMRC says the original order had to be revised “to ensure the rules for a stand-alone lump sum fit more easily with those for protected PCLS”. This is because there was a loophole for those individuals who before A-Day had the right to take all of their benefits in the form of a tax-free lump sum, or stand-alone lump sum. Although A-Day has put in place a 25% limit...