Loopholes in the new Pension Rules - Follow Up
4th August 2014
I recently wrote about the loopholes in the new pension rules announced in the Budget which would allow workers from their late 50’s to make huge tax and NIC savings by routing their salaries through a pension scheme.
As predicted, the drain on the Treasury coffers was going to be far too large to allow this provision to be enacted unchanged, and now George Osborne has announced that the amount that can be contributed to a pension scheme in a year when a withdrawal is also made is being limited to £10,000, rather than the current maximum of £40,000. This will not close the loophole completely, but it will certainly limit its use.
The rules will not apply in full to those who are withdrawing their pension funds under the old 'draw down' arrangements, in order to prevent unfair retrospective taxation.
Written by Peter Hedgethorne, Director