06 February 2008
More than 2,000 Equitable Life policyholders will have their
pensions slashed by up to half because of new tax codes following
the transfer of business to Prudential.
HM Revenue & Customs (HMRC) has embarked on a review of
their tax status after Prudential asked it which tax codes to
apply. The result has been a sharp cut in some policyholders'
monthly income, which some claim is the result of having emergency
tax applied to each of their policies. Prudential began making the
first annuity payments on Friday.
Prudential said: "We're completely in HMRC's hands. We have no
choice but to implement the tax codes we are given."
HMRC have said: "These customers would have been given a tax
code in the normal way. If there are problems, we are happy to look
at them."
