HMRC has published Newsletter 155, in which it identifies legislative provisions that it intends to amend to accurately reflect policy intention.
One of the most significant areas of uncertainty is the Pension Commencement Excess Lump Sum. The Newsletter acknowledges that the legislation does not work as intended for members with multiple pension schemes and says that it is “considering how to address this including whether it may require legislative change”. Legislative change is also expected to correct the calculation of the amount of a scheme-specific lump sum and reporting requirements.
The Newsletter includes a section on “frequently asked questions” (FAQs), in which HMRC offers confirmation in areas where uncertainty has been expressed, but we infer that HMRC does not believe changes are required to the Bill.
It will also be holding LTA working groups on transitional provisions (8 February) and reporting requirements (14 February), for which it will be issuing invites shortly.
HMRC states that it intends to publish further updates/clarifications (including examples) every two weeks and it already intends that these will cover pre-A-day pension rights, aspects of A-day protections, taxation of lump sum death benefits paid to non-qualifying persons and the overseas transfer allowance. It also invites representations on further areas where worked examples would provide clarity.
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