Removing emergency tax on income drawdown payments is one of the leading tax and pension planning simplifications that advisers feel would be most useful to them and their clients, according to recent research from abrdn.
More than a quarter (26%) of respondents to abrdn's bi-annual survey of 190 UK financial advisers said removing the tax would top their wish list of potential changes, over removing elements such as the tapered annual allowance and the money purchase annual allowance. Overall, the majority of advisers (59%) listed removing emergency tax within their top three priorities. Single or ad-hoc pension payments, or initial payments of regular pension income, are normally taxed on the ‘emergency month one basis'. This basis ignores a client's existing income tax position to date and uses a blank...
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