Autumn Statement - Pensions
The Chancellor's Autumn Statement yesterday did not announce any major changes to the pensions tax regime. The Chancellor confirmed that the Government will publish its response to its consultation on pensions tax relief at Budget 2016.
The Chancellor announced that the increases to minimum contribution rates will be aligned to the tax years. Instead of increases taking place in October 2017 and October 2018 as previously intended, they will now occur in April of the following year.
Pooling of Local Government Pension Scheme Assets
As part of the Autumn Statement announcements the Government is publishing guidance for pooling Local Government Pension Scheme assets into up to six British Wealth Funds, containing at least £25 billion of scheme assets each. The government is inviting administering authorities to come forward with their proposals for new pooled structures in line with the guidance.
Secondary market for annuities
The Government will set out in its consultation response this December its plans for allowing individuals to sell their annuity income stream. It plans to publish the related legislation in Finance Bill 2017.
Inheritance tax and undrawn pension funds in drawdown pensions
The Government will legislate to ensure a charge to inheritance tax will not arise when a pension scheme member designates funds for drawdown but does not draw all of the funds before death. This will be backdated to apply to deaths on or after 6 April 2011.
Dependant Scheme Pensions
Legislation will be introduced to "simplify the test that takes place when a Dependant’s Scheme Pension is payable".
Legislation will be introduced to enable the pension tax rules on bridging pensions to be aligned with DWP legislation following the introduction of the new single tier state pension from April 2016.