HMRC have published draft legislation and accompanying documents, including draft guidance, in respect of changes to the pension tax rules announced at Budget 2014 giving individuals greater pension flexibility, for comment by 3 September 2014.
The changes, to be included in the draft Taxation of Pensions Bill, will give individuals with pensions savings much greater flexibility in how they can take their benefits from age 55. From 6 April 2015, these individuals will be able to access as much as they want and when they want from a money purchase arrangement. However, under the new flexibilities, any future savings in money purchase arrangements will be subject to a £10,000 money purchase annual allowances say Harris & Co accountants Northampton
The changes in the published draft clauses include the removal of the higher tax charges where people take pensions under money purchase pension savings as they wish; the increase in flexibility of the income drawdown rules by removing the maximum ‘cap’ on withdrawal and minimum income requirements for all new drawdown funds from 6 April 2015; and the enabling of those with ‘capped’ drawdown to convert to a new drawdown fund once arranged with their scheme.