HMRC has published:
- a tax information and impact note on the technical improvements to the Annual Allowance provided for in The Registered Pension Scheme (Reduction in Pension Rates, Accounting and Assessment) (Amendment) Regulations 2013.
- a tax information and impact note for The Pension Protection Fund (Tax) (Amendment) Regulations 2013.
- draft Registered Pension Schemes and Overseas Pension Schemes (Miscellaneous Amendments) Regulations 2013, along with a draft Explanatory Memorandum, a Tax Information and Impact Note and draft guidance. The draft regulations introduce a new system for QROPs managers to notify HMRC every five years that the schemes meet the conditions to be QROPS. They also ensure that schemes that cease to be a QROPS after UK pensions savings are transferred into it are subject to the same reporting requirements as schemes that remain a QROPS. The regulations also include a penalties regime for non-compliant former QROPS and a relaxed test for overseas public service schemes and pension schemes of international organisations seeking benefits tax relief. Any comments on the draft regulations should be received by 21 June 2013.
HMRC and HM Treasury have launched an open consultation entitled Pensions tax relief: individual protection for the lifetime allowance. The consultation contains draft provisions implementing a new regime for ‘Individual Protection’ in the face of the reduction in pensions lifetime allowance from £1.5m to £1.25m commencing on 6 April 2014. This is the second protection announced in this year’s Budget for which individuals could apply, the first being ‘Fixed Protection 2014’, which will form part of the Finance Act 2013.
The consultation document establishes who is eligible to apply for ‘individual protection’, when they can apply and how the protection will mitigate an additional tax charge triggered by the lifetime allowance reduction.
The consultation closes on 2 September 2013. The relevant provisions will be included in the Finance Bill 2014, which is expected to come into force in the summer of 2014 but will have retrospective effect from 6 April 2014.