Draft legislation and Explanatory Note on pension tax measures
On 5th December 2005 the Government announced details of pension tax simplification measures to be included in Finance Bill 2006. Details of further measures were also announced on 7th March 2006. The draft legislation and Explanatory Note are now being published for all the previously announced measures, except for residential property and other assets. Draft legislation on recycling of tax-free lump sums was published on 3rd February 2006
Two additional measures that have not previously been announced are included in the draft legislation. One is a minor amendment to clarify the lifetime allowance provisions. The other is an amendment to the definition of abatement for public sector schemes. Abatement, as currently defined, may be applied only where a member retires and is re-employed in the public sector. The amendment will also allow a reduction of a scheme pension payable by a public sector scheme where a member does not retire on becoming entitled to their pension.
The revised draft legislation on bridging pensions are now published. This was originally published on 16th March 2006 as part of the draft Schedule. In response to representations that were received in respect of bridging pensions, the Government has agreed some further changes to this measure, which are reflected in the revised draft legislation.
Also published are draft regulations extending migrant member relief,
under paragraph 31 of the draft schedule published on 16th March 2006.
