HMRC urged to clarify annual allowance charge rules

In April 2011, the new annual allowance (AA) on pension contributions fell to £50,000. The government said it would allow people who exceeded the AA to pay the resulting tax charge directly from their pension scheme. However, the Revenue has not yet confirmed how this method, known as Scheme Pays, will work when an AA charge arises during years in which investors start drawing their pensions, Ian Neale, information scientist at Aries Pensions said. "HMRC has said that you must take the charge from the pension scheme before you begin taking or even calculating the member's benefits," s...