UK consults on pension tax simplification

UK – The Inland Revenue, the UK’s tax agency, is consulting on the planned simplification of pension taxation – and has announced some “substantive” changes to provision of information regulations.

“We are today launching a formal consultation period on the draft regulations which were previously published on our Finance Bill 2004 Internet pages,” the office said in a statement.

The Finance Act 2004 contains the primary legislation for simplifying the taxation of pensions, which will take effect from April 6 next year.

It said: “These regulations contain the detail of how the simplified regime will operate and we would welcome your comments by November 5 2004.”

The revenue office said it has updated the draft regulations in accordance with the final form of the Act and that it has made “some substantive changes” to the ‘provision of information’ draft regulations. These cover reporting and record-keeping obligations on schemes.

It said: “We want to keep the crystallisation process as simple as possible for the majority of taxpayers, for whom a lifetime allowance charge will never be in prospect.

“But we also need an information exchange between schemes and members which will enable them to ensure that, where a lifetime allowance charge is due, it is paid correctly and fully out of pension funds.”

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