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Has the Revenue Left a Loophole?

John Hayward pension consultant ponders the forthcoming demise of the sole purpose test for pension schemes
On 6 April 2006 tax approval granted to occupational and personal pension schemes by the Inland Revenue (IR) under its discretionary powers contained in ICTA 1988 ss 590(2)(a) and 630 respectively will come to an end when the current Finance Bill receives Royal Assent later this summer. Discretionary tax approval will be replaced by statute in the form of registration of occupational and personal pension schemes with the IR from which the customary tax reliefs and exemptions afforded to pension schemes will flow. This is a major sea change because the all-important 'sole purpose' test for the tax approval of an occupational or personal pension scheme in ss 590(2)(a) and 630 will disappear...

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