BROADSTONE is concerned that anti-avoidance measures in the Government rules on the Budget pension announcements may suffocate the bold pension reforms before they have seen the light of day. The Treasury are due to publish the results of their recent consultation exercise on Monday.
Simon Nicol, Pensions Director at Broadstone Corporate Benefits, said:
“There is no doubt the Treasury is concerned about some pension members taking advantage of the new pension freedoms to reduce their tax bills. In particular, the opportunity would arise for those over 55, who can take money out of their pensions at any time, to funnel earnings through a pension taking advantage of the 25% tax free lump sum. But little will be gained if we end up with a system of anti-avoidance measures so complicated and restrictive that pension contributors are in danger of inadvertently falling into tax traps or are put off contributing altogether. The Chancellor admirably chose to make pensions more attractive to ordinary members, let us hope another layer of Treasury imposed restrictions don't make the new freedoms illusory.”