An article by Andrew Meeson, director of Spencer Bracley Meeson appeared in the March issue of the Tax Adviser. So pensions simplification has finally happened! Well, to be perfectly honest, pensions were always simple: someone contributes money into a scheme where it is invested, at a later stage they get back a lump sum and an income, and at every step the government offers some tax breaks. The only thing that ever made pensions complex was the eight or more separate sets of taxation rules - a number which, according to both the Treasury and Lord Turner, served merely to 'create confusion and mistrust'.
On 6 April ('A Day') these were all swept away and replaced by a single set of rules for all private pensions. There are still some complexities within the new legislation, but with only one set of rules to worry about, the overall result is indeed simplicity.
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March 2006 by