PENSIONS – PENSION REFORM 2014/15
Synopsis: At the April 2014 Pensions Industry Stakeholder Forum the dates concerning the response to the consultation on the April 2015 changes, and the further steps to introduce this legislation, were announced.
Date posted: Monday, June 09, 2014
The minutes of the HMRC Pensions Industry Stakeholder Forum held on 17 April 2014 set out the timetable for the introduction of the April 2015 pension benefit flexibility changes, announced in the 2014 Budget.
The response to the consultation on these changes, which closes on 11 June, will hopefully be made before the Parliamentary recess on 22 July 2014.
HM Treasury will be looking to introduce a Pensions Tax Bill in autumn this year which will enact the tax legislation, with a technical consultation on the draft legislation taking place in August.
HM Treasury has arranged/will be arranging technical working groups to discuss how best to achieve the Government’s policy aims through its tax legislation. These groups will focus on six areas:
- the definition of defined benefit and defined contribution in HMT/DWP legislation
- tax planning and avoidance
- new products and innovation
- raising the minimum pension age
- the 55 per cent tax charge on death, and
- the interaction between pension tax rules and pension scheme rules.
The introduction of these changes by April 2015 represents a very major challenge. It seems likely that, but for the looming general election in May 2015, these changes would have been implemented over a much longer timespan. If the April 2015 date is to be met it is essential that providers and advisers are totally clear on the new rules. While a technical consultation on the legislation is to be issued in August, providers and advisers will be awaiting the finalised provisions. It seems likely that these will not be available until the early Autumn, leaving providers around 6 months at most to amend their systems. Even then, many providers may not be prepared to make any changes until the legislation is enacted.
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