Pensions Simplification, simplifying the taxation of pensions, the current state of play

Following the publication of HMRC's consultation document on pensions reform in December 2003, the Finance Act 2004 contained a detailed framework relating to the proposals. Some further changes were introduced in the Finance Act 2006.

Gordon Brown in his Pre Budget Report on 5 December 2005 announced a dramatic U turn. The ability of pension funds to invest in residential property and other currently prohited assets (like gemstones, fine wine etc) was effectively removed even before its introduction.

Certain pension scheme investments are now regarded as "taxable property".

Read our guide to taxable property.

HMRC have completed their comprehensive guidance notes. HMRC guidance may be viewed by following this link.

There are also important interactions with elements of pensions legislation that are within the remit of the Department of Work and Pensions (DWP). These in particular relate to issues relevant to protected rights.

The implementation date of pension simplification was 6 April 2006, otherwise known as A day.

To find out more about pensions taxtion reform please contact us.