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Home > Pensions > Personal Pensions

Tories support A J Bell’s call for ASP tax change

The Conservative Party has thrown its weight behind A J Bell’s fight for a review of the 82 per cent tax on residual ASP funds on death.

By Sharon Flaherty | Published May 22, 2009 | comments

In March, Andy Bell, chief executive and actuary at stockbroker A J Bell, wrote to Mark Hoban, shadow financial secretary to the Treasury, as well as Chancellor Alistair Darling, calling for a change of the tax rate on lump sum payments at death.

In a letter, Bell said: "An urgent review of the alternatively secured pension death benefit rules is required with a view to reducing the tax on lump payments on death in ASP from 82 per cent to 55 per cent.

"The current system is both unfair and administratively unwieldy. It involves interaction with the deceased member’s estate which can be time consuming and costly." (See article.)

According to Bell, the 82 per cent tax charge is driving pension savers to overseas pension schemes "in their droves."

In response, Hoban said Bell had argued a "powerful case" for the reform of the tax treatment.

"We have used recent Finance Bills and Pension Bills to argue the case for giving people greater flexibility on the use of their pension fund.

"We will look at this area very carefully in drawing up the manifesto for the next election."

Bell said: "The Conservative Party has entered into constructive discussions on this important issue at a senior level and it is clear that the strength of our arguments have been accepted and we will continue to push for change.

"It is disappointing that we have yet to receive any type of response from the government."

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