UK pensions face another tax raid
25th September 2011 by Tax Man No CommentsRetirement savers could face another pensions raid from the governing body that would raise ?7 bill from their funds.
Treasury officers admit that ditching higher rate pension relief on contributions is a ‘talking point ‘ for policy setters.
The measure is one of many Chancellor George Osborne is having a look at for speedy savings to lift the Treasury’s depleted coffers.
Relief for lower rate (20%) taxpayers would probably remain, but relief for higher rate taxpayers (40% and 50%) could go.
Any money raised from the move would go towards financing the suggested fixed ?140 a week state pension.
Although the measure is albeit a debating point, the Treasury is quick to point out that it is not on the official policy must-do list
Many financial gurus blame previous Prime Minster Gordon brown’s levy on dividend payments to pension backers for the sorry state of the UK’s retirement savings.
Tax relief to top up funds is the major attraction for pension investment in Britain. If this benefit is reduced or ditched, a lot of the incentive for saving would be lost.
Ex pats particularly would have small reason for keeping their pensions in Great Britain and would probably benefit from switching their money overseas in to a qualifying recognised overseas pension scheme (QROPS) or qualifying non-UK pension scheme (QNUPS).
Non-UK residents do not pick up tax relief on contributions to a UK pension, but can transfer them without have to repay any relief received.
In numerous cases, the improved and more flexible investment options, tax-free growth on funds and removal of currency restrictions makes a QROPS or QNUPS an attractive option compared against a UK pension.
Even little pension funds might gain from a switch to an offshore finance centre as many QROPS providers in Guernsey have announced low set up costs and administration charges which make
a transfer out of the UK a workable proposition for funds worth less than ?100,000.
To discover more about QROPS and QNUPS visit the leading firm QROPS.net
