Company pensions offer tax-free cash loophole

The Inland Revenue will begin consultation to erase the ability to earn higher tax-free cash through the purchase of a scheme pension instead of a lifetime annuity. But post-budget analysis from Scottish Equitable has found the timing of the change has potentially created a three-month window to use the system to purchase a company pension scheme annuity, as changes will be made in the Finance Bill 2006 which are then enacted by July of next year. Scottish Equitable warns a higher tax-free cash amount can only be generated through the purchase of a basic annuity without dependant’s b...