Munch’s scream – rumoured to be inspired by a tax assessment

Hymans Robertson’s very useful slides for employers who have employees with pension taxation problems

The link to the download is here.

It surprises me that personal pension taxation is still so hard that Hymans need to provide employers with a 25 slide deck of stuff they need to know.

Here are some unedited highlights with my thoughts interspersed

We’ll forgive abolishment but it should be abolition, either way the LTA is dead and if it comes back with Labour it will be part of a a general review of taxation. I’ve seen some shonky schemes such as offshore flexible annuities, designed to protect clients from the calamity of having to pay higher marginal rates of tax – tax speculation is rarely a good reason for tactical changes.

National insurance is less of an issue for employers than many thought. Salary sacrifice is exaggerated in its importance.

The Annual Allowance is now a tax-planning plaything in all its obscurity

I suspect that there are more slides in existence about the tapered annual allowance than people who are being caught by it.

The recycling tax limit has returned to £10,000. It is hard to see why there needs to be these triggers, surely the world would be a slightly simpler place if we made the rule – “getting paid from your pension” you’ve got an MPAA.

I am confused why slides like this exist, other than to justify tax departments and the depth of their research

It’s interesting how important the tax free cash sum  has become. It is designed to be spent but this top-end stuff with the concept of the protected tax-free cash sum, is a bit of a nonsense. Pensions are not about wealth preservation, HMT should simplify all this and scrap preservation. I’d certainly be thinking that if I was Rachel Reeves.

Death taxes on unspent pots are an ongoing irritant to those of us who think that pensions are for spending. I am bemused as to how a trivial commutation can have anything to do with these thresholds.

Here are more unlikely circumstances that don’t need legislating for. The sooner we state that unspent pots are part of the estate for Iht purposes , the better

Now we get into the playground that is the TAA (whoops acronym is already in use).

The slides tell you all you need to know, there will be many people doing these calculations but very few checking them. Perhaps when RTI fully harnesses AI we will have an enforcement regime that can cope with this.

And it will surprise  no one that not only do we have protected LTAs but there are protected AA limits with pre and post April 2016 benefits persisting.

Enough said.