200,000 pay too much tax on RACs

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HM Revenue and Customs is changing the way retirement annuity contracts are taxed as around 200,000 pensioners are paying too much tax.

From April 2007, all income from RACs, except purchased life annuities, will be classed as pension income and taxed under the Pay As You Earn (PAYE) system in the same way as personal and occupational...

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