HMRC plans may help to avoid fixed protection losses
HM Revenue & Customs is planning a retrospective power in the Finance Bill to protect people against the loss of pension fixed protection. Read more about fixed protection here.
The annual allowance for tax-privileged pension saving was cut from £255,000 to £50,000 from April 2011. The lifetime allowance was also reduced from £1.8m to £1.5m from April this year. Read more about Inland Revenue limits here.
Savers had until April 5 to apply for fixed protection to retain the £1.8m lifetime allowance. Anyone who does not have fixed protection will see savings above £1.5m taxed at 55 per cent unless they have registered for primary or enhanced protection.
An HMRC spokesman says: “A regulation-making power will be introduced to allow changes to be made to the fixed protection legislation. This new power is intended to allow regulations to be made to help prevent an individual losing fixed protection in certain specific circumstances.”
Further details are not yet available.