Of general interest is the latest edition of the HMRC's pension schemes newsletter. This issue focuses on the Taxation of Pensions Act 2014, which received Royal Assent on 17 December 2014 and confirms which types of payments will be considered flexible access of pensions funds.
The newsletter confirms that:
- regardless of the form in which payments are taken from an individual's pension fund under the new flexible access regime, they will be taxed as pension income and the normal PAYE rules will apply. Examples are given of the payments which count as flexible access, including:
- a payment from a flexi-access drawdown (FAD) fund, including a payment from a capped drawdown fund that would breach the cap;
- an uncrystallised funds pension lump sum (UFPLS);
- a payment under a flexible annuity contract;
- a payment of a DC scheme pension where the scheme has fewer than 11 other pensioner members and they became entitled to the scheme pension on or after 6 April 2015; and
- a stand-alone lump sum from a DC arrangement where the individual was entitled to primary protection but not enhanced protection.
In addition, it is confirmed that any person who had a valid notification for flexible drawdown before 6 April 2015 will be deemed to have flexibly accessed their rights from that date.
There are also reminders that:
- scheme administrators should have issued annual allowance pension statements for the 2013-14 tax year to all registered pension scheme members contributing more than £50,000 per year to a pension scheme. Members may use an online tool to check their tax liability even if they have not received a statement;
- schemes operating relief at source should submit their 2013-14 annual return of individual information;the draft Annual Allowance Order 2015 has been published with draft guidance; and
- the start of the qualified recognised overseas pension scheme (QROPS) re-notification process is being delayed until 6 April 2016.
View the newsletter.