HMRC in further change to age 75 and drawdown rules
HM Revenue & Customs changes rules to ensure they work properly for members of foreign pension schemes.
Age 75 and drawdown rules are set for yet another shake-up to make sure they work properly for members of foreign pension schemes that contain funds that have received UK tax relief, HM Revenue & Customs has confirmed.
As explained by FTAdviser’s Regulation Tracker, the Finance Act 2011 removed the restrictions on paying lump sums and drawdown pensions that previously applied from the age of 75.
Further reforms permitted an individual, with a minimum secure pension income of at least £20,000 a year, to draw unlimited amounts from their drawdown pension fund - flexible drawdown - if certain conditions were met.
Yesterday (25 April), HMRC revealed it now had to propose amending these rules so that the tax rules applying to members of foreign pension schemes that contain funds that have received UK tax relief are compliant with EU law.
The amendment states members of relevant non-UK schemes may receive the same payments with broadly the same tax treatment as members of registered pension schemes with effect from 6 April 2011.
According to HMRC, the amendment would not increase any person’s liability to tax but the changes would have retrospective effect back to when the Finance Act 2011 reforms came into force on 6 April 2011.