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HMRC consults on trio of draft pensions regulations

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HMRC is consulting until 16 January 2015 on:

  • draft regulations which specify the information: (1) scheme administrators must provide to the receiving scheme administrator when transferring pension funds which can be paid tax free; and (2) schemes changing their structure, range or number of members must provide to HMRC in the interests of preventing pension liberation;
  • draft regulations to align the rules for overseas pension schemes more closely with those for registered pension schemes when the pension flexibility changes take effect in April 2015. The regulations: (1) remove the requirement for some overseas schemes to use at least 70% of UK funds to provide individuals with an income for life; (2) strengthen the requirements for overseas schemes or providers to be regulated in their home country; (3) require scheme benefits to be payable no earlier than they would be under the rules of a registered pension scheme; and (4) modify the conditions for tax-free transfers to include countries covered by tax information exchange agreements; and
  • draft regulations designed to ensure that individuals with annuities issued before 6 April 2015 should not be able to take advantage of the new flexibilities by transferring their old annuity to a new annuity issued after 6 April 2015. Annuities acquired on or after 6 April 2015 following a transfer will only be treated as a lifetime annuity for the purposes of the pensions tax rules where issued on a ‘like for like’ basis.
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