The Financial Conduct Authority (FCA) has issued a reminder to firms that no cancellation rights exist for pension commencement lump sums (PCLS) after HM Revenue & Customs (HMRC) highlighted potential tax charge issues in its latest newsletter.
Commentators said the FCA/HMRC stance "belies belief" and runs the risk of some people facing a 70% tax charge should they change their mind after taking a lump sum. HMRC's pensions schemes newsletter 173, published today (25 September) explains how tax legislation applies to tax-free lump sums and the tax implications when lump sums are returned to pensions. The FCA said to support firms' understanding of the statement, it was "providing an explanation of how our existing rules on cancellation rights operate in these scenarios". It said: "Under our rules, consumers have the right ...
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