Tax Issues in Pensions: The Impact of Recent and Proposed Developments

Developments in Recent Finance Acts and Their Impact

• Abolition of Lifetime Allowance
• Introduction of the Lump Sum Allowance (LSA) and Death Benefit Lump Sum Allowance (DBLSA)
• Difference in the income tax rules for the beneficiary where the pension investor dies, either:
  • Aged under 75
  • Aged 75 or over
• Pension inputs:
  • Increase in the pensions annual allowance (AA) and the income level at which it is tapered
  • How pension inputs are measured in defined benefit (e.g. final salary) schemes
  • Making use of unused AA
  • The AA charge
    • ‘Scheme pays’ elections

Autumn 2025 Finance Bill

• Inheritance Tax (IHT) treatment of unused pension funds from 6 April 2027
• The current IHT regime for pensions
• How it will change once the proposals are implemented
• Interaction with the income tax regime for pension death benefits
• How unused pension funds at death could have very high effective tax rates
• The extra compliance burden on personal representatives of the deceased and pension scheme administrators
• Impact on retirement planning strategies

Salary Sacrifice Schemes

• Proposed changes from April 2029

Self-Invested Personal Pensions (SIPPs)

• Qualifying investments
• Updated guidance on in specie contributions
• Use in OMBs

Review of Recent Cases

• Auto-enrolment compliance
• Unauthorised pension withdrawals
• Importance of tax treaties in determining which jurisdiction has the taxing rights on pensions, where someone has become non-resident

Our trainer is a Chartered Accountant who qualified with PwC in 1988, spending his last 18 months there in the Tax department. In 1989, he joined a leading financial training company as a tax tutor. Since 1992, he has been self-employed as a Professional Tutor and Training Consultant, specialising in tax update courses for accountants, lawyers and investment managers.

Our trainer has been teaching in the financial services industry since 1994 and writes regularly for Tax Insider. He also speaks at conferences of bodies such as the CIOT and the ICAEW.

This Tax Issues in Pensions course makes delegates aware of:

• The implications of the abolition of the lifetime allowance
• The tax issues associated with pension inputs
• The income tax rules for those receiving pension benefits on the death of an investor
• The plans to extend inheritance tax to pension death benefits written into trust
• The advantages of salary sacrifice schemes for pension contributions, and how the government intends to restrict them from April 2029
• The key issues associated with Self-invested Personal Pensions (SIPPs)
• Recent pensions tax cases

• This course covers all the key recent and proposed changes in the tax rules for pensions.
• Numerical examples are included to help delegates understand the impact of the rules.
• The trainer is a Chartered Accountant who has over 35 years of experience in tax training and has taught courses leading to qualifications of bodies such as the CII.

• This course will be suitable for anyone who comes across pensions in their professional work and wants to know more about how the recent and planned tax changes might impact their clients.

The tax rules for pensions have changed several times in recent years. Particularly concerning the amount of tax-relieved annual pension inputs permitted and the maximum pension rights that can be built up before retirement. Further changes are planned, including the extension of Inheritance Tax to most unused pension funds on death. This change will have a big impact on how people plan for their retirement.

These and other recent developments will be covered in this training course, along with a review of recent tax cases covering a range of other pensions issues.

There will be numerical examples to help demonstrate the practical impact of these changes.