Previous Page  8 / 18 Next Page
Information
Show Menu
Previous Page 8 / 18 Next Page
Page Background

page 7

BUDGET

16 MARCH 2016

These include making lump sums payable on serious ill-health

tax free before age 75 and taxable at the individual’s marginal

rate when paid at age 75 or more. It will be possible to convert

dependants’ flexi-access drawdown accounts to nominees’ accounts

when dependants reach the age of 23, thereby avoiding a 45%

lump sum tax charge.

A trivial commutation lump sum payment will be allowed for

defined contribution pensions in payment, where total pension

savings would be under £30,000. Top-ups to fund dependants’

death benefits will be classed as authorised payments. Changes

will also be made to the treatment of charity lump sum death

benefits. The measures will take effect from the date of Royal

Assent to Finance Bill 2016.

Dependant scheme pensions

The calculation basis to determine whether a dependant’s scheme

pension exceeds the authorised limit will be simplified with effect

from 6 April 2016.

Bridging pensions

The tax rules on bridging pensions will be aligned with Department

for Work and Pensions legislation following the introduction of

the single-tier pension from 6 April 2016.

Employer financed pension advice

The income tax and NICs relief available for employer-arranged

pension advice will be increased from £150 to £500 from April

2017, ensuring that the first £500 of any advice received is

eligible for the relief.

Life insurance policies

The tax rules for part surrenders and part assignments of life

insurance policies will be changed to prevent excessive tax charges

arising on these products. The legislation is due in Finance Bill

2017, following consultation.

There will also be a consultation on changes to the categories

of assets that life insurance policyholders can choose to invest in

without giving rise to an annual tax charge under the personal

portfolio bond legislation.

saver

Consider whether the

20% reduction in the

lifetime allowance for

2016/17 means you

should claim one of

the new transitional

protections.

£